Investing in Clean Energy Technologies: Green Technology Articles: Eco20/20

Investing in Clean Energy Technologies

Thankfully, much of the world's population is finally catching on to the importance of switching to green energy. New companies and technologies are being founded daily and the green energy industry is growing like never before. Because of this, there are limitless opportunities to both help the advance of eco-friendly technology and increase your net worth. Investing in green energy is an idea whose time has come.

Why invest green? First, with global warming becoming an increasing concern, it is important that companies have the needed support to create solutions to our numerous environmental problems. It is also imperative that we prepare for peak oil, when the demand exceeds the supply and prices skyrocket. Investing in green technology may also help improve our energy security and help local economies by creating new jobs. Finally, this is an excellent way for savvy investors to cash in on new eco-friendly trends. Right now, you might be thinking, 'this is a great idea! How do I start?' There are several answers to that question.

One way to begin is to put money into renewable energy load funds. There are several good choices available for investors. The New Alternatives Fund (NALFX) invests in all areas of alternative energy as well as companies that promote clean water, clean air, recycling, and natural foods. Another fund, the Calvert Global Alternative Energy Fund (CGAEX) takes an active approach to management, searching for companies that are most likely to have a long-term competitive advantage in their respective fields. It holds investments in many areas, with 80% of investing going toward green energy. The Guinness Atkinson Alternative Energy Fund (GAAEX) invests in companies that derive at least 50% of their profits from green energy or green energy technology. Although these funds require less detail work on the part of the investor, they also carry hefty expense ratios ranging from 1.25% to 1.97%, which detracts from their appeal for many investors.

Another option is to buy in to ETFs (exchange traded funds), the most popular type of exchange-traded products. The Market Vectors Global Alternative Energy ETF (GEX) is currently the top in holdings of wind energy technology and has a low expense ratio of 0.5%. A different choice, Powershares Global Clean Energy Portfolio (PBD) has an expense ratio of 0.75% and focuses mainly on green and renewable energy sources and the companies that work in this field.

Yet another way to invest is by choosing and purchasing individual stocks. This can be tricky and is probably not a good idea for novice investors. Successfully investing in individual stocks requires a thorough knowledge of the workings of stocks and the market. It is also imperative that investors research each potential investment to have a thorough understanding of its business models and strategies. Although green energy is definitely on the rise, the recent economic slump hit many green research companies hard, shutting them down before they could reach their full potential. There are many resources available on the Internet that can help you make wise decisions before investing your money. With the proper research and strategies, investing in clean energy can be a wonderful way to make money while being socially responsible.