Invest in Green Energy
Green energy refers to sources of energy that are less polluting and sustainable, and can include solar energy, wind energy, hydrogen energy, fuel cells, biomass, geothermal, hydropower and ocean energy, for example. It can also refer to locally sourced energy, since transport is energy efficient. Some argue that natural gas is relatively clean -- in part because it is abundant domestically. There are green companies that adhere to strict social policies, as well, refusing to accept unfair labor practices and animal testing. If you invest in them, you could benefit financially and be satisfied knowing that your money has contributed to the greater good.
Instructions
1. If you are a new investor, you will need to familiarize yourself with basic types of investment vehicles, such as mutual funds, index funds and exchange-traded funds, or ETFs, because some of these funds specialize in green companies. When you invest in these funds, you are investing in a diversified portfolio of stocks. In theory, diversification reduces your risk. However, there are fees you will incur, as well as tax implications from turnover within the portfolio. Although index funds and ETFs generally are not as expensive as mutual funds on an ongoing basis, mutual funds can have their advantages, as well.
2. Some investors buy the same stocks that comprise mutual fund portfolios. While you will be spared some of the expenses of the funds themselves, you will incur brokerage fees every time you buy and sell a stock. Whether or not you can come out ahead depends upon your ability to research and understand the fundamental value of the companies whose stock you would like to purchase, as well as how the market behaves -- as a whole, and within the green sector.
3. You can invest in green energy mutual funds, index funds, ETFs or stocks at brick-and-mortar brokerages or through online discount brokerages. Online, fees vary depending on several factors, including how many transactions you conduct within a given amount of time. Some funds require a minimum investment. Be sure you understand what the transaction will cost you and remember that you might have to pay capital gains taxes on your investments even if the value of your account goes down. Also, remember that you will have to pay the broker again when you sell your funds -- how much depends on the type of fund you have. In other words, there are many factors to consider before choosing an investment.
