|
Investing in Energy
Energy is essential for a well-balanced investment portfolio. Demand from western countries continues to grow while emerging markets like China, India, and Brazil are struggling to find ways to supply billions of people with electricity, heating, and transportation. Realizing that energy should play a pivotal part in your stock investment portfolio is easy. The hard part is figuring how, where, and when to invest.
The energy industry is extremely dynamic and complicated. New technologies like ethanol seem to pop up only to fade away a few years later. It seem that Governments are constantly getting involved and trying to push for greater use of renewable energy sources like wind, solar, and water even if they don’t necessarily provide the best return on investment. The recent disaster in Japan has changed the perception of nuclear energy and there are some countries now looking to become completely nuclear free. The oil spill in the Gulf of Mexico has also caused some governments to limit the amount of offshore drilling they allow. Natural gas could be a great alternative, but recent studies have shown the process used to extract the gas from the Earth could be harmful to the environment. There are several great documentaries highlighting the complexity of the industry and what the future has in store for us.
Given the complexity and changing nature of energy, it can be extremely difficult for investors to figure out how to effectively invest in the energy industry. They know that they want to participate, they just don’t necessarily know how. Luckily there are tons blogs, books, and tools available to help investor navigate the energy industry and make a profit. One great resource is the Fisher Investments book which is a comprehensive guide to the industry and helps people make informed investment decisions. Another great resource is the US Department of Energy’s website which has information on the different types of energy, new technologies, effects on the environment, and articles on energy efficiency, policies, and much more.
As I said before, Energy is a must have piece of a diversified portfolio. The problem is getting a solid foundation and understanding of the industry so that you can make informed decisions. The best way to do that is to read up on the industry itself as well as what make energy companies great. A quick web search will provide tons of investing blogs and tools that can help you on your journey.
|