Many wise investors found it profitable to place their money in alternative energy sources in 2007, when the price of oil skyrocketed to more than $100 per barrel. Solar energy investments had the most returns, yielding three-digit gains in as little as one year. But soaring oil prices are not the only reason for green investments. Governments of developed nations are also encouraging investors to acquire green shares by promoting massive alternative energy projects for future energy security.
What are Green Investments?
When a person invests in a particular company, he is placing his assets in that company in the hopes that those assets will grow and return him a decent size profit. Generally, people invest mainly for personal wealth. But when a person places his assets in green investments, he hopes to receive returns while he helps make the environment a cleaner and safer place. Many investors call this socially responsible investing. You make yourself wealthier at the same time that you do something good for the environment.
A Look at the Numbers
Around $25 trillion is currently placed in green investments in the United States. That is around one in every $10 circulating within the American economy. That figure is set to grow even more as economists predict the rise of the alternative energy industry and other similar businesses. For example, the number of wind turbines installed in residential areas has grown by 30% since 2007. Organic food production has also increased by 20%.
Making a Wise Move with Green Investments
Basic Green Investment Tips
Consult a financial analyst if you are planning any ventures into green industries; you should also, however, be at least familiar with the investment process yourself. Below are some basic tips we’ve gathered from investment experts that you can apply when looking to grow your money in green shares.
- Diversify. Diversity is the spice of life “they” say. It can also save your assets. It would be nice to think that all green investments have zero risk, but from an investor’s point-of-view, their is always risk. Look for investments that will potentially yield the most profitable gains and invest in several of them.
- Research. Be wary of greenwashing, or making false claims about a company’s products, services, policies, or technologies to make investors believe they are investing in environmentally sound projects. Ask some questions first. Conduct investigations. Always look into where you’re putting your money.
- Strategize. Develop a pool of information resources that you can consult from time to time. Asking questions about the company you are about to invest in is a good start, but also look into independent and non-biased sources that can give you an objective view of the company’s past and current economic performances. Annual Reports and Corporate Social Responsibility Reports are usually available on company websites for prospective investors. The Dow Jones Sustainability Index will also specifically give you an accurate view of how environment-friendly a company is.
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