MACS wrote:If a brother had a little extra $ in his pocket... where would it be best invested to take advantage of the current situation? PM is fine... :-)
Investing in green energy is a big deal but complicated…
Start with ESG. Environmental, social, and (corporate) governance. This a new litmus test for does a company stand for social goals or just maximizing profits. This is invading a lot of pensions like CalPERs but also mutual funds. Pressure is exerted to divest from low ESG. Divest from Exxon and buy a wind company even though you would make more money with Exxon. This is a real thing so you can’t ignore it.
https://www.unpri.org/download?ac=16515
Good boring reading on energy transition.
Easiest thing to do is buy green energy ETFs. There are plenty. It’s all the rage. The question is at what point do these become good investments. Some are feel good garbage.
First Trust Global Wind ETF
First Trust Nasdaq Clean Edge Green Energy ETF
Plenty more.
You could shoot for individual stocks: more risky trying to strike gold.
Wind: Vestas
Solar: Enphase
EV: Tesla
Utilities that are rather green: NextEra, Iberdrola
Batteries: Samsung, Panasonic, Contemporary Amperex Technology
Hell buy all of them for a nice green portfolio. None of these companies I mentioned is undiscovered by any means.
Undiscovered stuff we can’t get at because that’s private investors and venture capital. The way VC works in Silicon Valley is they buy parts of 20 companies. One strikes gold and 19 go bankrupt or never make a penny. Diversification is your friend! I’ve worked for VC owned companies out here. It’s a different world.
Another way to go is to buy Exxon or Chevron or BP or Shell. Wait….that’s not very ESG. Actually big oil has massive green energy R&D budgets. They are not just going to pump the last barrel of oil and then turn the lights off and close shop. You get a good money maker paying a 3% dividend who just might discover the next great thing.
Now what I didn’t get into is what if you have some nice green investments but they get outperformed by banking, tech, consumer staples, etc. well that happens a lot. Again, diversification is your friend.
Disclaimer: None of the companies I mentioned do I own individual stock in although I’m sure I do through mutual funds.
An area I’m interested in is green hydrogen as opposed to blue hydrogen and blue ammonia although those are interesting too.
Not a ton of options for investing but there are ETFs out there.
Bloom Energy is an example company…I was even looking at going to work there for a bit.