Green Investing Gold Rush Edmond OK
Asset Planning Solutions, LLC
The “green rush” is on. From large to small investors, the financial community is mining for green investments, making them one of the fastest-growing areas of the market.
Billionaires and millionaires are pouring trillions of dollars into green companies, while smaller investors are putting money into a slew of new green mutual funds and exchange-traded funds, or ETFs.
Green companies are dedicated to find alternative energy solutions, reducing carbon footprints and cleaning up the environment. The breadth and depth of money going into these companies is creating more viable investment opportunities for the market.
“Green investing has definitely taken root,” said Michael Herbst, analyst covering green funds at Morningstar, a leading investment research firm. “You have some very, very experienced, savvy, bottom line-oriented investors taking a pretty hard look at some of these opportunities and determining that they are attractive over the long haul.”
Green mutual funds can be as volatile as they are popular But as with any gold rush, the risks can be high and the market volatile. Financial advisors caution that anyone venturing into this market better be prepared to stomach volatility and stick it out for the long term in order to realize strong returns.
“Most of the publicly-traded companies in this space are small and their share prices can be highly volatile,” said Steve Schueth (pronounced “sheeth”), president of First Affirmative Financial Network, an FCC-registered group of 120 advisors, which manages $700 million in socially-screened funds. “The innate nature of these kinds of investments requires a longer-term, well-diversified investment strategy.”
Billionaires and millionaires have started staking out claims in the green rush. Texas oil magnate T. Boone Pickens is investing $10 billion to build the world’s biggest wind farm . Bill Gates dropped $84 million in an ethanol company. Sun Microsystems co-founder and billionaire Vinod Khosla invested in cellulosic research.
Multi-millionaires worldwide are also panning for green. According to the World Wealth Report 2008, released by Capgemini and Merrill Lynch financial advisors, wealthy individuals have upped their investment in green industries. Total investment in the clean technology sector rose by 41 percent from 2005 to US$117 billion in 2007, the report said.
Wealthy individuals are devoting a greater portion of their portfolios to green industries. Globally, individuals with more than $1 million in assets put 12 percent of their portfolio in alternative energy investments, while individuals with more than $30 million put slight more at 14 percent, said the World Wealth Report.
In the U.S., high net-worth clients parked $39.5 billion in socially and environmentally-screened investments with management advisors in 2007, more than double the $1...