Because many wind energy companies are foreign-based there are always geopolitical and currency risks to weigh. Investors also will want to be wary of emerging companies with unproven ideas. At a minimum, you’ll want to be sure that the company is well capitalized and has a strong business model.
When investing in a fund, such as an exchange traded fund, Siegel of Green Chip Stocks recommends making sure it is balanced. Some funds are very sector specific, focusing on solar stocks, for example. If something were to happen to impact that industry such as a shortage of the electronic components that convert sunlight to electricity, your entire fund could crash. There are funds such as Market Vectors Global Alternative Energy ETF Trust (GEX), which includes wind, solar, geothermal and other business types.
As you look for investment opportunities, be aware that the global economic slump began hitting the renewable energy sector hard late last year and it’s continued into the first quarter.
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