Is There a Safe Way to Invest in Renewable Energy Today?

Mr. Lynch, I have a multipart question. You have said that you felt that we were already in a recession, could you elaborate on that? You have warned readers a number of times in 2007 and in early 2008 about the volatility of solar stocks. I am truly glad I listened, thank you. Is there another more conservative way to play the solar industry? Thanks. — Brad Harris, Austin Texas

Thanks for your note, Mr. Harris. I am glad I was able to help you avoid the solar stock landslide. It really has nothing to do with being a solar stock. It is true for any stock or stock group that moves “too far, too fast.” Stocks (or anything for that matter – houses, commodities etc.) cannot simply continue to go up endlessly. Once you see a stock, a market or a market sector start to go up so fast that the growth curve approaches vertical – the END IS NEAR. In addition to a crazy curve you will also notice that all the news is good and everyone is positive. In other words, EVERYONE is already onboard and there are no more buyers left to buy. Take your profits and step to the sidelines.

In regard to your question regarding a recession, yes I think we are currently in a recession. In addition, when all is said and done I think the “official start” of the recession will turn out to be around November of 2007. As a result, when you really start to see the word “Recession” on all the front pages of all the magazines and newspapers it will be more than likely that the recession is almost over and the stock market will have recognized this fact and will be up 10 to 20 percent at that time. Why is that? It is actually very simple, in this case, there will be no more SELLERS left when the “Recession” news hits the nationwide press and all that will be left are BUYERS and stocks will rise as a result.

Finally in regard to more conservative ways to profit from our bright renewable energy future, you may want to look into renewable stock ETF’s.

An Exchange-Traded Fund (or ETF) is an investment vehicle traded on primary exchanges, much like a stock. An ETF represents a collection or ‘basket’ of stocks, in this case, all of the stocks in the “basket” are related in some way to the renewable sector. It is a relatively simple way to somewhat diversify your holdings WITHIN the solar sector (not place all your bets on one stock) buy buying only one or two ETF’s. On average ETF’s will be less volatile than an individual stock, so they will not do as well as the most aggressive solar stocks when they are “hot,” but they will not do as poorly when solar stocks are out of favor as they have been recently.

Below is a list of some renewable energy related ETF’s that you may want to look into:

Symbol

 

ETF Name

 

GEX

Market Vectors Global Alternative Energy ETF

PBD

PowerShares Global Clean Energy Portfolio

PBW

PowerShares Wilderhill Clean Energy

PUW

PowerShares WilderHill Prog. Energy

PZD

PowerShares Cleantech Portfolio

QCLN

First Trust NASDAQ Clean Edge U.S. Liquid Series Index Fund



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I have worked, for 33 years as an independent analyst and investor in small emerging technology companies. I have been actively involved in following developments in the renewable energy sector since 1977 and am regarded as an expert in this field. I was the contributing editor for the past 17 years to the Photovoltaic Insider Report, the leading publication in Photovoltaics industry that was directed at industrial subscribers, such as major energy companies, utilities and governments around the world. I currently am a consultant to a number of technology and solar related companies. I can be reached via e-mail at: solarjpl@aol.com. Visit my website for the promotion of solar energy - www.sunseries.net

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