Socially Responsible Investing Research Paper Example | Topics and Well Written Essays - 1750 words

Socially Responsible Investing - Research Paper Example Empirical research that has been conducted by different people has shown that in selecting a portfolio, potential investors not only consider statistical measures like risk and return but also psychological factors such as sentiment, overconfidence, and overreaction. In short, it is a general observation that heuristic-driven bias, frame dependence, and market inefficiency plays a crucial role in shaping the kind of portfolios that investors make the preference to, the type of securities they find attractive, as well as the biases to which they are considered subject to. For a long period, the process of socially responsible investing has been the subject of significant attention in practitioner and academic literature. The process has so far attracted research process that has been geared towards examining and discussing the financial advantages associated with the process, its effects on social change, pertinent issues and challenges associated with SRI logistics as well as the motives and inspiration that drive investors. While it may be easy to know and comprehend some of the demographic makeup, associated with socially responsible investors, what distinguishes them from non-socially responsible investors as well as what their motives and inspirations are. Our understanding of the decision process behind SRI is still limited; this is influenced by the fact that only a few studies have tested hypotheses about investor behavior in the context of socially responsible investing.