ETHICS IN THE PROFESSION - Essay Example

“Investments involve the transfer of necessary, existing risk from one party to another. This doesn't mean that every investment is good or wise or safe, of course” (Rodeback). However, many others are of the view that investments cannot be considered as an unethical activity since most of the investments are used in the constructive purposes of the nation. They believe that there is no point in keeping the extra money in shelf and it is better to deposit it in legitimate channels. This paper makes a case study to analyze whether investments are ethical or not.

Investments can be classified into three broad categories; private investments, entrepreneurial investments and social investments. In private investments, a person is lending his resources for buying ownership in enterprises for the sake of that person’s own enrichment. In other words, the motives of the investor are selfish. Such investors will invest their money based on the chances of getting more returns. For example, share trading is one of the major private investment channel in which many of the greedy individuals invest their money for maximizing their returns.

However, the risks associated with such investments are more even though the chances of higher returns are high. It is often quoted that 90% of traders lose, which leaves only 10% of traders as consistent winners. The 90% of traders that lose in the markets are those for which trading is just another form of gambling whereas for the winning 10% it is a business (Wreford) From the above statistics, it is clear that both the winners and the losers in trading approached the trading activity with a wrong intention.

The winner treated trading as another form of business and the loser approached it as another form of gambling. Business is always motivated by profit-making and thus it becomes unethical. On the other hand, many other people invest term deposits which offer fixed returns on maturity. Such deposits are safer even though the investor may get only a fixed amount of return. Non-greedy investors may invest in such investment schemes and we cannot argue that their activity is unethical since their motives were not selfish.

In short, investments which offer high returns with higher risk are unethical whereas investments which offer fixed returns with minimum risks are ethical in my opinion. In other words, investments which generate high levels of risks can be considered as unethical investments. Entrepreneurial Investment is the second category of investment. In this type of investments, a party is lending or giving resources to enterprises for the sake of the success of that enterprise. The success of the enterprise will indirectly influence the economic success of a nation.

For example, recently big organizations in America collapsed as a result of recent recession and subsequently, American economy also showed signs of destruction. Many people lost their employment because of the destruction of organizations and economy. If an investor invests in such organizations, the chances of recovery for that organization may increase even though the investor’s chances of losing money will also be increased. The recovery of the organization may help employees to protect their employment.

In other words, the investor helped the organization and its employees immensely by putting his own