Environmentally conscious investing is one of the hottest trends in wealth management. As an environmentally conscious investor, you can increase and diversify your portfolio while supporting companies that are working to make a difference by protecting the Earth and its environment. So-called green investments make up a growing segment of the market in socially conscious investing, as participants choose to put their money where their beliefs are.

Opportunities for the environmental conscious investor range far beyond the obvious choices of organic products and biofuels. Green investing embraces the development of sustainable technologies, alternative energy sources, even environmentally sensitive waste management solutions. To move into environmentally conscious investing:

1. Explore green mutual funds for environmental conscious investing.

2. Keep up with trends in environmentally conscious investing with green financial publications and websites.

3. Get help from financial advisors who specialize in guiding the environmentally conscious investor.

Action Steps
The best contacts and resources to help you get it done

Consider mutual funds for your environmentally conscious investing

For the environmental conscious investor, green mutual funds from respected providers offer an easy means of investing in earth-friendly companies and sustainable technologies while practicing conservative wealth management.

I recommend: Mutual funds from Portfolio 21 Investments support environmentally conscious investing in renewable energy and ecologically sustainable products. Learn more about environmental conscious investing by reading "What Is Green Investing?" from Green Century Funds; then look into mutual funds from this top-ranked provider of environmentally conscious investment products.

Get advice for the environmentally conscious investor from leading green investment publications

Make sure your environmentally conscious investing decisions are informed. Take advantage of the resources offered by green investment publications and web news feeds.

I recommend: GreenMoney Journal, available online or in an enhanced hard-copy subscription, offers advice and resources for the environmental conscious investor. At the website you can also search archives, monitor a green events calendar, purchase books on green investing and sign up for a free quarterly e-newsletter on environmentally conscious investing. Keep up with trends in environmentally conscious investing with the news feed from SocialFunds.com.

Get assistance from environmental conscious investing advisors

As an environmentally conscious investor, you're not alone. A whole industry has grown up around providing sound investment advice to those interested in supporting green companies, sustainable technologies and other socially conscious investments. Work with a financial advisor who shares your environmental consciousness to maximize the effectiveness of your portfolio.

I recommend: Advocacy Investing, a service of Marc J. Lane Investment Management, focuses on providing the environmental conscious investor with sound advice from a shared philosophic base. To locate an environmentally conscious investment advisor near you, search the listings provided at the Social Investment Forum, a clearinghouse for socially conscious investment information.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Not every investment product that calls itself green is a responsible choice for environmentally conscious investing, so educate yourself and look for advisors, individual investment products and funds with established track records among the socially conscious investment community.

Investing green with a piece of your retirement, business assets, or general investment portfolio not only sends an important message, but has a long term ability to profit as the world goes greener. Hardcore DIYers may want to take more risk by investing in individual stocks, but I would not recommend it. If you’re interested in it anyway, here's a good place to start. I recommend spreading your risk amongst a combination of ETFs (exchange traded funds) and mutual funds, and it’s always best to understand your time horizon and not look at your investments every day. Green energy in particular can be volatile, so don’t be scared when the markets are choppy.

So the questions is: where to start? Well, shameless self promotion has never come so easy - you can start at my blog, Smugly Green, for some basic information. But here are some steps you can take to invest greener or more responsibly:

1.) If you don't do it yourself, get a financial adviser. Find someone local, someone you can trust, and always understand that there is a conflict of interest when someone is paid on commission. If you're a DIYer, I recommend online brokerages like AmeriTrade, optionsXpress, or eTrade - they tend to be cheaper than any brokerage house, and if you're comfortable managing your portfolio, they're definitely worth it.

2.) Allocate a % of your overall portfolio to green. This is a personal choice - it is always good to have your risk spread among many different industries, many different countries, and many different asset types. Green is just a part of the puzzle. For me, it's the whole puzzle, but I'm willing to take that risk. How much makes sense to you? 20%? 10%? 5%? When you make the decision, understand that green has to be a long term investment, at least 5 year horizon, and probably longer. Green can also be risky and volatile, like any stock.

3.) Start investing with the old guard of green. There are some green funds that have been around for a long time, it makes sense to start with them. They have long, proven track records, and more importantly, have shown a long term dedication to green investing. Many funds are popping up on an almost weekly basis now as money floods green sectors, but avoid trying to make a quick buck. Start with these:

New Alternatives Fund (NALFX)
Winslow Green Growth (WGGFX)
Domini Social Equity (DSEFX) - SRI investment

4.) Consider investing in the new green do gooders. There are some new green/SRI investments worth looking at by respectable companies. These track records are short, but I own some of them, and they are worth looking at:

Guiness Atkinson Alternative Energy Fund (GAAEX)
Winslow Green Solutions Fund (WGSLX)
Calvert Global Alternative Energy Fund (CGAEX)

ETFs are also an excellent way to "own the index" and expose yourself to green industry at a cheaper cost:

PowerShares WilderHill Clean Energy (PBW)
PowerShares Cleantech (PZD)
Claymore S&P Global Water (CGW)
Market Vectors Alternative Energy (GEX)

And for the very new, but very interesting funds and ETFs, check these out:

ELEMENTS Global Warming (GWO)
ELEMENTS Solar Energy (TAN)
SAM Sustainable Climate Fund (SMCNX)
SAM Sustainable Water Fund (SMWNX)

5.) Add income to the portfolio. Green income is hard, if not almost impossible, to come by yet. There are ways in the future it will be more viable (green real estate investments, green corporate bonds, etc.), but for now, it's a tough buy. Instead, there are some excellent socially responsible investments that provide yields that you can feel better about:

Pax World High Yield (PAXHX)
Domini Social Bond Fund (DSBFX)

6.) Construct your portfolio. This is the tricky part. I recommend mixing four or five of the investments above that don't overlap very much. For instance, investing in Water, Green Energy, Socially Responsible, Income, and Cleantech will avoid a lot of unnecessary overlapping.

7.) If you own a business, think about bonusing green stock or investing company assets in green. Every little bit of green investing sends the message to Wall Street: be sustainable.

Matt Moscardi is the President and Founder of Smug Investments, LLC, the general partner of the Smug Green Global, LP hedge fund. He is also a registered investment adviser offering green portfolio construction and consultation to individuals and institutions looking for exposure in publicly traded green investments. For questions or contact information, see http://www.smuginvestments.com/, or read his blog at http://smuginvestments.blogspot.com/.