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Why 'Good Guy' Stocks Can Help You Beat the Market
Article

Why 'Good Guy' Stocks Can Help You Beat the Market

Fortune, 2018

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7

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Recommendation

More and more investors are disregarding the saying “good guys finish last” and flocking to the shares of companies with strong environmental, social and governance (ESG) policies. According to financial journalist Ryan Derousseau, evidence suggests that, in the long run, “good guy” businesses outperform those companies that strictly focus on short-term results. While never offering investment advice, getAbstract nonetheless recommends this informative article to investors and others assessing the stock performance of ESG-minded corporations.

Summary

As recently as 2012, investors were skeptical about the stocks of companies that deploy environmental, social and governance (ESG) strategies. Many market participants believed that “doing good” meant sacrificing corporate profitability and competitive share returns. But analyses of accumulated data show that ESG practices are translating into robust stock performance over the long term. A 2017 study of 615 mid-cap and large-cap enterprises from 2001 to 2014 found that firms that plowed their earnings back into their businesses by investing in “...

About the Author

Ryan Derousseau is a financial journalist who has contributed to MoneyFortune, CNBC and other business media outlets.


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