Five Envrionmentally Friendly Investing Ideas
NEW YORK (MarketWatch) -- Say you've changed your light bulbs to low-energy alternatives, strived to live the "reduce, reuse and recycle" mantra, and even traded in your gas-guzzling SUV for a hybrid and are now looking to "go green" in your investments. But can you feel secure about your retirement years if you take the plunge into green investing?
Jim Mellon and Al Chalabi, co-authors of the new book "The Top 10 Investments for the Next 10 Years: Big Ideas, Money Fountains and Your Path to Prosperity" think so. Here are five tips from them that can help you seize the right green opportunities:
Put your money in renewables.
From wind farms to tidal and wave projects; from waste-to-heat projects to more extensive nuclear generation, and with solar power coming up on the rails, the race is on to transform the electrical energy generating landscape in the world. "Perhaps the most visible of these initiatives occurs in the form of wind power," says Mellon.
Invest in the elements.
Big money is investing in the extractive industries, which mine the key components of solar panels. Gallium, indium, germanium, and other materials are vital to the production of solar panel cells, and the companies that harvest these components are a great place to invest your money.
"Carbon" trading in the European Union shows promise.
Countries that are part of the Kyoto Protocol have been forced to figure out how to limit their carbon emissions without damaging their economies. One way some EU members are doing this is through an Emissions Trading Scheme, in which each country assigns permits to its biggest emitters, allowing them certain amounts of emissions. In turn, any company not needing its whole allocation is then free to sell the surplus in the ETS market where the buyers are typically companies that need more than their allocations. Investors may wish to consider looking at funds that offer an entry to investing in such permits -- one such fund is Climate Change Capital, which is listed on the London Stock Exchange.
A move away from landfills will be profitable.
The space constraints and the by-production of dangerous methane gas that accompany landfill sites are opening the doors for a new industry that seeks to turn waste into energy by burning it. Companies involved in the waste industry worldwide include U.K.-based Shanks and Biffa, both listed on the London Stock Exchange. Other promising opportunities are with the Japanese company Daiseki, France's Séché Environnement, and Finland's Lasila Tikanoja.
Overwhelmed? Invest in an ETF.
The sheer volume of opportunities in the green market can be overwhelming for any investor. Luckily, you can take advantage of this market by investing in alternative energy in a more general sense through the Market Vectors Global Alternative Energy ETF , which trades in the U.S. under the symbol GEX. You can learn more about this ETF by visiting www.vaneck.com.
By Marshall Loeb