For some investors, the top 3 investment goals are returns, returns, and returns. For others, goals can be more nuanced. Protecting principal is a common goal. Liquidity (having your money available to you quickly and without penalty) is another. Impact investing, which can be quite personal, is another type of investment goal that is important to some investors.

Investopedia defines Impact Investing as “directing money into companies that are committed to positive social or environmental goals.” This is very personal, for a number of reasons.

First, what areas are important to you? Low carbon emissions? Women on executive boards and in leadership positions? Reducing tobacco use? Businesses that align with your religious values? There are many ways to define your impact, and likely no two people are the same.

Second, we each get to define what the word “positive” means in evaluating goals. For every American who would like to punish (or divest from) gun manufacturers, there’s another American who supports those same companies and the gun industry. Same thing with wind energy—one President supports it, the next is opposed. You, the individual investor, get to decide which specific values you want to emphasize or de-emphasize in your portfolio.

When my clients want to do Impact Investing, the obvious question is how to align your investments with your values without sacrificing growth. Defining their values is step one. Step two is screening top investments to see which ones best align with those values, while still offering the strongest expected returns. Good returns are a must—most investors want to maximize their investment returns, so it is critical that the expected returns of the impact portfolio are in line with the expected returns of our non-impact clients.

For clients who choose Impact Investing, there tends to be a level of satisfaction about putting their money to work for something larger than themselves. I think of so many of us who live near Lake Tahoe, and what a treasure our lake is! The idea of protecting the lake from pollution and other types of harm is compelling to me as a local resident, so I choose to take various actions to support that. Impact Investing is one such action.

Not everyone is an Impact Investor, and that is OK. There’s a simplicity to designing an investment portfolio that begins and ends with the question of how to maximize returns. For others, the draw to Impact Investing is strong.

However you choose to design your investments, invest smart and invest well!

Larry Sidney is a Zephyr Cove-based Investment Advisor Representative. Information is found at https://palisadeinvestments.com/ or by calling 775-299-4600 x702. This is not a solicitation to buy or sell securities. Clients may hold positions mentioned in this article. Returns are not guaranteed and past performance does not guarantee future results. Consult your financial advisor before purchasing any security.