How do the risks and returns of investing on AVID compare with other investment opportunities?
Investing in carbon credits and investing in the stock market are two very different types of investments with different risk and return profiles.
Investing in the stock market involves buying stocks or shares in companies that are publicly traded. Returns come from capital appreciation (an increase in the value of the stock) or dividends (a portion of the company's profits paid to shareholders). The risk and return profile of investing in the stock market can vary depending on the industry, company, and other market factors.
Investing in carbon credits directly supports projects to combat climate change. Carbon credits have been shown to beat the S&P 500 by more than 2x over the past 5 years. There are also unique risks with carbon credits that are different from stock market risks (see “What is the risk level of Carbon trading?”). However, as companies focus more on combating climate change and moving to carbon neutrality, demand for carbon credits will increase.
Ultimately, the decision to invest in carbon credits will depend on individual goals, risk tolerance, and investment preferences. It is important to carefully research and understand the risks and potential returns of each investment before deciding.