In the last decade, the spotlight has gone from tech, to real estate and then to oil, so will alternative energy the next hot spot for exchange traded fund (ETF) investors to flock to?
Chris Farrell, the economics correspondent for Marketplace, says that it’s indeed going to be the case. He cites several reasons including: 1) speculators are always looking for new places to put their money and 2) if oil continues to head south, they’re going to be on the hunt.
Alternative energy has a particularly good reason for a boom, because it’s a global phenomenon from which nearly anyone, anywhere can benefit.
Farrell thanks speculators, in fact, because they take the risks. Most investors don’t know which technologies will bring about alternative energy, but speculators will do the gambling and create the bubble. Naturally, bubbles burst, and that’s as good a reason as any to take the money you’ve made and run once your holding falls 8% off its high or the 200-day moving average, whichever comes first.
As an investor, if you also want to be environmentally sound or to capture what Farrell thinks is the next big thing, there are solutions whispered in the wind and showering you with warmth.
The main critique toward wind power is that the wind stops blowing when you want it most: when it’s hot. But the new technology is allowing for wind power to be harnessed into a reliable base load for electric power, according to one Stanford University study.
U.S. electrical demand is forecast to grow another 39% through 2030, while the cost per unit for wind should come down with larger-scale operations, reports Steve Halpern for Blogging Stocks. PowerShares Global Wind Energy (PWND) and First Trust ISE Global (FAN) are ETFs to help you harness the wind. They launched July 8 and June 27, respectively.
Claymore/Mac Global Solar Index (TAN) holds 25 solar stocks, while the Market Vectors Solar Energy (KWT) holds 34 securities. They launched April 15 and April 23, respectively. There are two general forms of solar power that are up and running, PV, or photolytic, and thermal, which transfers heat through concentration. The alternative energy arena will get us through some trying times when demand will be fierce.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.