Is Investing In Green Stocks A Good Idea?

Today we have a guest post from Bruce here at the self sufficiency site. He makes some interesting points about investing in companies that are maybe more environmentally friendly. Many people have money invested in shares so do you think it is time to re-consider your portfolio to have maybe a slightly more environmentally friendly bias? Or do you think it would be harder to make money with a portfolio of this manner? Interesting to think about at the very least.

Wherever you go in the world now, you see evidence that it is going “green”. Whether you believe in global warming or not, you can’t escape the fact that recycling and protecting the environment is on the minds of many people and nations.

This leads one to wonder whether it is a good idea to move your stock investments to those companies that are environmentally friendly? When you are looking for the best stocks to buy right now in 2010, should you be concentrating on companies that are leading the way in this green movement?

There are two different types of people who might ask that question: those that just want to make money and hop on a hot trend and those people who are genuinely concerned about our environment and want to invest with a clear conscious. Those that want to invest with their heart might not care quite as much about making a profit as they are trying to reward environmentally friendly companies with their investment dollars.

Eco friendly stocks have been around for ages but you might want to clarify your intent before investing. Many major companies are now jumping on the green bandwagon and making efforts to go green, at least that is what they are saying. They might be ramping up their recycling efforts and doing any number of other things that may be helpful to saving energy and the environment. Are these the types of companies you want to find and invest in?

Your other choice would be to buy stocks in companies that are actually in the business of green technologies such as harnessing the sun, the wind, or any other kind of resource that will be an improvement over what we have. This type of company is leading the way and breaking new ground for a better, cleaner tomorrow. This type of stock is one that might have the most upward potential but it could also be a big bust if the technology never catches on.

If you are buying stocks for the first time and want to start out with either of these strategies, you can find all sorts of lists online of companies that fit each criterion. In fact, you will probably find so much material that it will be difficult for you to narrow down your best choices. But that is normal for the stock market as everyone has their own opinion and you can always find stock tips and recommendations wherever you go.

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3 Responses to “Is Investing In Green Stocks A Good Idea?”

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  1. ayesha says:

    To be honest I have found it is such a tangled mess trying to work out who own/invests corps, companies and banks that I gave up! The only thing that I did that I truly believed and trusted to ‘do what it said on the box’ was our mortgage with the Co-oP.

    They promise all investments are ethical!!?? hmm, however the most important thing to me is that they don’t invest in anything to do with the arms industry. All their own brand (generic in US?) products are fair trade.

    They also have a cool headquaters in Manchester which is completely solar, grey water, carbon blah ,blah. But they are a huge business with shops and outlets in virtually every town or village in the UK.

    It can be done, pragmatically, and don’t get me wrong I’m no cheerleader for the global warming thought police, I just think we ought to perhaps leave some of the stuff for later, just in case our great, great grandchildren don’t want to live in the new dark ages, cos they were um, dark and cold and ‘not much fun at all’

    • Ayesha, well said.

      Not having any stocks ourselves I don’t have to think about it but it is certainly something to consider. If we buy “eco” and “green” products then we should think about what we invest our money in as well.

      The problem, as outlined in the post is who really is a green investment. So many companies simply jump on the bandwagon but part of their company is anything but green or environmentally friendly.

      Them dark ages sure sound um “dark” 😉

  2. I invest in an index fund that invests in alternate energy companies. I feel good about it and I believe, with time, it will do well. That will be a win-win for me!

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