Energy Efficient Business: Energy Investments

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Most investors find sector-specific investments risky. However, with the surge in oil prices, it is advisable to explore energy investments to balance your self-directed IRA. Renewable energy sector has immense potential to develop. Recent government policies to boost renewable energy provide lucrative investment options in the sector.

Energy investments were practically unknown to the investor looking to protect his retirement portfolio, until recently. Even the passive investor is waking up to the volatile consequences of a series of disappointing economic events over the past few years. Investors need to have a complete understanding of the benefits of investing in energy assets through their self-directed IRAs.

Though a self-directed IRA provides you the freedom to select, invest and manage your portfolio, choosing a combination of direct and indirect energy investments makes your IRA portfolio powerful and balanced. Such a portfolio benefits from reduced taxes and asset protection. For example, you can avail tax benefits provided by the government, if you invest in renewable energy through your self-directed IRA.

Energy investments include investing in oil, natural gas, coal and renewable energy sources like solar energy, wind, or biomass etc. Investing in energy can take both the indirect and direct route. Energy investments through stocks and mutual funds form the indirect route whereas investments through limited partnerships or lease agreements take the direct route.

How to invest in energy?

In the current economic environment where oil prices reach higher levels everyday, investment options vary from picking the right oil stocks to investing in long-term master limited partnerships. Energy stocks that be...

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...ing wind power using windmills or wind turbines to create electricity. With an annual growth rate of over 30% in the last few decades particularly in Europe, wind energy is the fastest growing renewable energy next only to the biomass energy sector. Companies such as Vestas Wind Systems have increased their wind turbine capacities in line with huge capital inflow backing the wind sector.

Companies are adapting to energy-efficient business practices. As businesses increasingly continue to demand renewable energy, opportunities for green industries have grown immensely. Google’s $400 million investment in green energy has impacted its stock price positively. Likewise, GE Capital, ConocoPhillips and NRG Energy stocks have seen a positive rise in their stock prices after announcing plans to form a joint venture to invest $300 million on new energy development.

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