Green Is the New Gold: Seven Environmentally Friendly Investment Tips for a Prosperous Future

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Jim Mellon and Al Chalabi suggest you "go green" with some of your investments--and they explain the best options out there now.

Going green with at least some of your investments is a sure moneymaker.

Sure, you'd like to "go green" in your investments. If you could find some financially sound options, why not? As environmental issues have heated up and gained more and more press, you've embraced the concept of saving the planet. You've changed your light bulbs, strived to live the "reduce, reuse, and recycle" mantra, and even traded in your gas-guzzling SUV for a hybrid. (Well, at least you've considered it!) Problem is, you need to feel secure about your retirement years--and the concept of green investing just seems a little too, well, trendy for comfort.

"As our planet's dwindling resources become more scarce, and the need to find alternate energy sources becomes more pressing, green investing will start paying off in a big way," says Jim Mellon, coauthor along with Al Chalabi of The Top 10 Investments for the Next 10 Years: BigIdeas, MoneyFountains and Your Path to Prosperity (Wiley, February 2008, ISBN: 978-1-84112-802-3, $29.95). "Going green with at least some of your investments is a sure moneymaker."
Here are just a few tips that could help you prosper from the "green" movement:

Put your money in renewables. From wind farms to waste-to-heat projects to solar power--the race is on to transform the electrical energy generating landscape of the world. For example wind farms are sprouting all over Europe. An industry once derided as a novelty is now a multi-billion euro/dollar sector all on its own. But beware: This is a capital-intensive business, subject to a lot of government interference and scrutiny, and some sophisticated investors have already creamed off some of the good potential returns.

Invest in conservation companies. Companies involved in conservation, wind power, and nuclear power are likely to see significant growth in coming years. Like any realm of investing, it's one thing to know the options are out there, and a completely different story knowing exactly which companies to look into. Mellon and Chalabi's book provides examples of great green options.

G is for Green…and Germany. Germany is the world's biggest consumer of PV cells--which are used to make solar panels--because of the favorable fiscal and monetary regime for solar power in that country. Today, the country accounts for half of all the solar PVs installed in the world. Several world-beating companies have grown up to satisfy the local--and subsidized--domestic demand. A company called Q-Cells is one place you might want to invest.

Invest in the elements. Gallium, indium, germanium, and other materials are vital to the production of solar panels, and the companies that mine and extract these components are a great place to invest your money.

Look into waste-to-energy systems. The waste-to-energy industry is one that seeks to turn waste into energy by burning it, or by using the by-product methane gas, which results from disposal of any organic waste, to generate heat and electricity. Companies involved in the waste industry worldwide include UK companies Shanks and Biffa, both listed on the London Stock Exchange.

Energy-saving will help you save in more ways than one. Within the next few years, energy-saving gadgets could be commonplace in all households. Historically, we haven't bothered to fine-tune energy consumption of devices because energy supply has not been an issue. But now there are just so many devices in every household that it's really adding to the problem. Look for more companies to pop up that will provide energy-saving solutions for the household appliances we use every day.

Overwhelmed? Invest in an ETF. Investors can take advantage of the green market by investing in alternative energy in a more general sense through the Market Vectors Global Alternative Energy ETF, which trades in the US under the symbol GEX.

"These green opportunities are a gold rush that every serious investor should consider," says Mellon. "But investors should remember to always diversify their investments. The green realm is full of promise, but having too many eggs in one basket always carries risks. There are other great opportunities out there with real estate, commodities, and more. To ensure your investments have made the most for you over the next ten years, you'll want to check those out as well."

About the Authors:

Jim Mellon is an investor with interests in companies in several industries. Jim spends most of his time working on startup ideas and on investing.

Al Chalabi is a business consultant, entrepreneur, and author who has been based in Asia for eleven years and has extensive experience of developing economies. He helps corporations establish and grow their operations in Asia, particularly in emerging economies like China.

About the Book:

The Top 10 Investments for the Next 10 Years: BigIdeas, MoneyFountains and Your Path to Prosperity (Wiley, February 2008, ISBN: 978-1-84112-802-3, $29.95) is available at bookstores nationwide, from major online booksellers, and direct from the publisher by calling 800-225-5945. In Canada, call 800-567-4797.


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