Exchange Traded Funds (ETFs) are a cross between a mutual fund and a stock or, rather, a mutual fund that is traded like a stock on an exchange. According to Investopedia, ETFs are attractive to those of us without the time or expertise to analyze and pick through individual stocks. ETFs are funds that represent a group of stocks, and renewable energy ETFs may be a long-term cash cow for investors seeking out the big picture.
All of that is according to Tom Lydon of ETF Trends. He focuses directly on wind and solar power funds as being particularly promising. While funds associated with the solar energy sector are down now, they have solid potential to rise and rise high. With peak oil getting closer and electricity rates on an upward trend for the foreseeable future, now may be a good time to buy into wind and solar ETFs, says Lydon, or at least something to pay attention to if you have an eye for investing.
As for wind power, Lydon points to the Department of Energy’s goal to get six percent of US power from wind by 2020. That provides a bit of insurance that wind power will be a primary energy focus in the decade to come, and very likely several after that. Also, wind power is spreading all over the country, not just in California and Texas. There are pockets of high potential from coast to coast (and off the coasts).
For more of Lydon’s viewpoint on wind and solar ETFs, see his blog on ETF Trends.
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