Why You Should Invest in Alternative Energy Stocks

Alternative energy stock portfolios are a smart addition to an investor’s portfolio. There is a lot of growth potential in these investments, making them a great choice for long term investments. The money you put into these stocks will further the goal of putting alternative energy sources into use.

It is predicted that by2013, alternative energy will be a $ 13 billion business. What does this tell investors? Basically, it says that there is some serious potential here. Buying stock in an alternative energy start up now could result in your having some stock in the next big thing in the energy sector in a few years time. Consumers are getting tired of paying the high costs of petroleum based fuels. While this by itself isn’t enough information to go on, it does tell you that this is a field which is almost certain to grow and grow fast.

This does not mean that you don’t need to do your homework about any alternative energy stocks you may be considering. A financial planner’s advice could be valuable here. There are some alternative energy companies which seem to be very solid, but you shouldn’t go out and snap up every stock in this sector. First Albany Capital analyst Sanjay Shrestha tells us that investors should exercise caution in chasing these stocks. As an investor, you are probably aware that most of the companies in the alternative energy sector are startups or very young companies.

This means that at this stage there will be little or no earnings in the short term or a history of earnings to look into. This could mean that a bubble is in the offing, such as was seen a few years back with the dot com industry. Bubbles are bad news for investors.

Things look good for the alternative energy industry as a whole, with a growing amount of investment being made in these companies – says Juliet Davenport, Chief Executive of Good Energy, a UK based alternative energy supplier. This is an industry at a crossroads. These companies need the continued support of investors, customers and investments to become a success and to further the goal of increased use of alternative energy sources.

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