The future of Energy, Ethics and Green Investing
Today's Financial News - Posted November 16, 2009
Penny Sleuth’s Tom Bulford discusses ethics, investing and where they coincide.
Tom Bulford (Penny Sleuth):
Are you an ethical investor?
I ask this because this week is National Ethical Investment Week.
[note, this article was originally published 12 November 2009 at Fleet Street Invest]
And if the conference I attended last week is anything to go by, ethical investing could do with a kick-start.
I read a survey recently that said two-thirds of us believe ourselves to be ‘green’ and ‘ethical’. And almost a half would like the money we invest to make a positive difference in this respect.
But in the final reckoning, the survey said, most investors will only make green and ethical investments if they make good money as well.
Have they made money? So far the evidence would suggest not.
Although ethical investing covers a multitude of concepts, one of the more popular is alternative energy. But since the height of enthusiasm for this bold new investment concept, the Eco-Index of clean energy stocks has fallen by some 70%.
One fund manager to take advantage of this tide of conscience was Guinness Asset Management, which launched its Alternative Energy Fund two years ago.
As manager Edward Guinness put it: “I can safely say that late 2007 was not the best time to launch… however, investors now have an excellent opportunity to enter the sector at a time when we believe high future returns are achievable.”
Well, he would say that.
But still, investors should be interested in any sector of the stock market where shares are available at less than one-third of the price paid in recent history. Especially if, as Edward Guinness argues, “the medium and long-term drivers - firm energy prices and government support to address climate change and energy prices security – are stronger than ever”.
The fall from grace of alternative energy stocks is easy to explain and is an object lesson to anybody tempted to follow stock market fashion.
To read the rest of Tom Bulford’s article, click here.
Next Article: Why Obama went to China
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