An investment which any investor needs to seriously consider is one in alternative energy stocks. This is a sector with incredible growth potential and is a good bet for investors looking for some stocks which will perform well in the long term. Money which is invested in these stocks also assists in achieving the worthwhile objective of increasing the use of alternative energy technologies.
By 2013, it is forecast that alternative energy will be a $13 billion industry. This shows us that there is a lot of long term potential in this sector. If you were to invest in an alternative energy start up, you could in a few years time find yourself owning shares in the alternative energy equivalent of Microsoft! People are tiring if the high price of gasoline; this isn’t enough information by itself, but does show that there is real potential for investors in the alternative energy industry.
Just because of this, you should not run out there and buy up every share you can in the entire industry. There are some alternative energy companies which seem to be very solid investment choices, but as Sanjay Shrestha, an analyst at First Albany Capital cautions, investors need to exercise care in chasing these stocks. You are almost certainly aware that these companies are by and large startups and other very young companies. There are not a lot of profits being made yet by companies in this sector, but this is likely to change over time. One word of caution, there is potential for bubbling in this industry, much as was seen in the dot com field around the term of the century – bad news for investors and a basis for being cautious.
Having the advice of a financial planner or analyst would be a good idea when looking into alternative energy stocks. Seek out companies which have a sound revue producing model and steer clear of those which are “hope” stocks; that is to say, they have a new technology but no plan in place to monetize their business.
Financial planners and analysts can help you to make the right decisions in alternative energy investments. You need to look for stock in companies which have a clear plan to produce revenue and steer clear of stocks which are from companies with lots of technology but no revenue. The outlook for the industry as a whole is very positive however. There is an increasing amount of money coming into these companies, says UK alternative electric supplier Good Energy chief executive Juliet Davenport. This is an industry at a critical stage – these companies need the support of customers, investors and government entities to make sure that the problem of climate change can be tackled and the potential of alternative energy sources realized.
Author: M TaylorThis author has published 6 articles so far.