Dividend Stocks

Investing In Stocks For The Sake Of Cash Flow

First time visiting? Consider subscribing or the following:

Eco Stocks – A Continuing Trend

Posted on | January 15, 2013 | Comments Off

Getting lucky and predicting trends correctly is a definite advantage when trading in the stock market, as these trends will often dictate the popularity and profitability of certain stocks. However, this is a hard thing to do and if you’re relatively new to buying stocks it can seem daunting. An easier way to determine which stocks will be successful is by identifying which trends will continue to be prevalent for long periods of time, and to invest accordingly.

One of these enduring trends is eco-friendliness. By investing in companies with a strong environmental ethos, or in businesses that provide green products or services, you could be set to make long-term gains. The longevity of the trend itself is not the only thing that drives these potential profits forward; eco-friendly companies are a wise choice for investment for many reasons, but as with all investments, research is key.

The Pros

  • Companies that are able to instigate a strong, long-term environmentally friendly ethos and working practice are automatically well protected against new regulations and potential new environmental business procedures.
  • Eco investment opportunities are present within all areas of the economy – you don’t have to concentrate on the obvious wind turbines and electric vehicles – there’s capacity for profit almost everywhere.
  • Eco-friendly companies have a long-term sustainability. Whether you’re a believer in global warming or not, people are wising up to the impact they have upon the planet and are beginning to live accordingly. Eventually, eco-friendly practices will be essential; there will come a time when there is no other option. This means that investments with strong green credentials already have a head-start.
  • As the industry develops, new sustainable practices and opportunities will emerge, meaning that opportunities to invest will only grow. The transformation in how we think about environmental responsibility means that investing in green companies will be high on the list for new investors, which will keep the trend going.

The Cons

  • A lot of eco stocks are relatively new to the market and as such do not have long pricing histories, making it hard to know when it would be best to invest. Researching the product or services that a company provides and determining which look the best for long term success may help with this.
  • Be on the look-out for companies which may be subject to government regulations and restrictions, such as biofuel. This could affect the growth potential and therefore the return.
  • Make sure you fully research the companies you’re interested in. Some may have great green credentials on paper, but their practices may not match up. For instance a pharmaceutical company who run off renewable energy and are at the forefront in recycling and waste management, may still source their materials from environmentally harmful sources. This could harm the company’s credentials in the long run, ultimately affecting their stock.

Eco Stock Examples

As mentioned before, eco stocks do not have to be the obvious. Depending on your personal ideas of what means green, there are a plethora of investment opportunities to choose from.

  • EBay (EBAY) is a large, established company which doesn’t usually jump to the forefront of people’s minds where eco-friendliness is concerned, but is a great advocate for recycling. In particular, second-hand clothing is a strong eco choice - specifically due to the rising awareness of sweatshops and less than virtuous clothing factories.
  • The Hain Celestial Group (HAIN) is a company specialising in natural and organic food and beauty brands. Most of their brands are vegetarian and many are vegan, which, as well as being a growing market in itself, also helps the environment by cutting out the carbon footprint left by the meat industry; the single highest producer of greenhouse gas emissions.
  • Waste Management, Inc. (WM) are, you guessed it, a waste management company which have a large recycling sector and also provide waste to energy services. Their green credentials include working with environmental groups to set aside land for wildlife habitats and replacing hundreds of their diesel-fuelled trucks with vehicles that run on natural gas.

These are just a few examples of the types of investments that you could consider when looking for green investments. As with all stock buying, it is important to thoroughly research the company before buying into them, so that you can make sure they fit your needs appropriately.  Thinking outside the box when shopping around for environmentally friendly stocks and shares can turn up more options and better opportunities. What’s more, you’ll be able to sleep soundly in the knowledge that your hard earned money is invested in industries that are benefitting the planet as a whole.

This post was written by Coral Pearce-Mariner for mydividendstocks.com. If you’re interested in learning more about investing and saving money or if you’re interested in contacting Coral then please visit her blog at https://www.samedayguarantorloans.co.uk/blog/.

More on this topic (What's this?)
Eco ways to save money
Read more on Eco's at Wikinvest