- LATIN AMERICA
- MIDDLE EAST
- United Kingdom
- United States
- New Zealand
- South Africa
By Andrew Leckey
Taking advantage of greatly reduced stock prices is a tricky business. One strategy is to find an investment area so certain to grow that it will be around long after market traumas subside.
Green investing, which offers the added potential of innovative companies getting snapped up by bigger firms, could be one of those areas.
Buying stocks of firms that play a significant role in the environment and energy conservation can be highly speculative, as indicated by the beatings so many have taken this year. Fledgling green endeavors such as solar and wind also benefit from government subsidies that aren't guaranteed to last forever.
Thinking long-term, however, green investing still makes some sense.
"We believe the clean technology trend is unstoppable," said Rafael Coven, managing partner for the San Francisco-based
"Green investing is broad-based in nature, but the two biggest components are power and fuel," said John Hardy, senior equity analyst with
Eric Wesoff, senior analyst for Greentech Media in San Francisco, says defining green investing is a "painful question" because everyone has their own definition. "Green investing encompasses clean chemical, clean materials and clean power or energy," he said. "That can be on the generation side, such as solar or wind, or on the demand side, in terms of making homes and businesses more energy efficient."
One company stock that both Hardy and Wesoff agree has definite potential is
"We pick companies for the Cleantech Index from a few thousand that we could potentially choose from," said Coven. "However, we are losing companies fast to acquisitions as established companies look for growth opportunities, and that makes it difficult to find good replacements."
It is quite possible, he said, that in another five years, there may be no more pure solar or wind businesses because they'll all have been acquired by larger companies seeking stronger growth.
Its Cleantech Index has a wide range of stocks, from giants such as diversified global manufacturer
"One of the things that investors have to consider is whether they are fond of government subsidies," cautioned Wesoff. "Most new energy sources like solar and wind benefit from government subsidies, and if you believe these subsidies will end, you might not want to get involved."
On the other hand, he said, you may believe subsidies are likely to continue and will give those industries a "leg up" that allows them to reach parity with other sources such as coal and natural gas.
There are green investing stocks worth noting.
Most green subsectors are high-growth and new, which means far more losers than winners, as was the case with carmakers in business during the 1920s, said Coven. His job is to find the winners.
"Big companies such as
Available at Amazon.com:
Investing - Green Technology Stocks Take Their Licks But Keep on Ticking | Successful Investing
© TRIBUNE MEDIA SERVICES, INC.