Socially Responsible Investing (SRI) refers to the practice of abstaining from certain investments on ethical grounds. SRI practitioners disregard the profit they could make from investing in companies with business practices that conflict with their ethical code. Socially responsible investors might refuse to invest in a company because of its products (e.g., cigarettes or alcohol), its management practices (e.g., covering up or failing to address abuse allegations), or its political affiliations.

Because it’s tough to predict exactly when a recession will start, investors should maintain a diversified portfolio at all times to limit losses during market downturns. The safest stocks to own during recessions are those of large, reliably profitable companies with ample cash flow and a track record of weathering turbulence. Companies in consumer staples, which include food, beverages, household goods, and toiletries, are also relatively safe bets during recessions because their products are basic necessities.

Though the phrase may be “the greater the risk, the greater the reward,” high returns from risky investments are far from guaranteed. It may be more appropriate to say that the greater the risk, the greater the potential reward. Investing in an obscure upstart with a world-changing idea but no track record of success can pay off enormously if that company translates its idea into a viable business, but far more upstarts fail than go on to be the next Apple or Walmart.

The expense ratio is the percentage of a mutual fund or ETF’s assets under management that go toward paying the fund’s annual operating expenses, which includes the salary of the fund manager/advisor, recordkeeping fees, taxes, and accounting and auditing fees. These operating expenses reduce the amount of capital in the fund to be invested, which inevitably lowers the fund’s returns. Expense ratios have been trending down for decades. According to an Investment Company Institute report, the average expense ratio for index equity mutual funds fell from 0.27% in 1996 to 0.06% in 2021.