As an oil and energy investor, you’re always looking for the best ways to profit in these fields.
Right now, there is a lot of talk about global warming and how to deal with it. Politicians are coming up with green ways to invest in the future, federal incentives are being given out to green companies and customers, and ideas for how to make the future more sustainable are being talked about in major press conferences. Plus, oil, gas, and coal companies are now being seen in a negative light.
All of this press about global warming can have a big impact on how you decide to invest your money, and how you can make money in the future. Before you completely rework your portfolio to include greener companies and clean energy, let’s dive into what global warming is and how it has an effect on you as an oil and energy investor, and the world as a whole.
What Is Global Warming?
Global warming, also known as climate change, describes how the world’s average temperature has increased at the fastest rate in history over the past 50 years. It occurs when air pollutants, like carbon dioxide, collect in the atmosphere and absorb solar radiation and sunlight that have bounced off the surface of the earth. The radiation would normally go into space, but it doesn’t. So now, it’s trapping heat and making the planet hotter. This is the greenhouse effect. Scientists warn that the average temperatures in the United States could increase by up to 10 degrees Fahrenheit over the next century unless we’re able to, somehow, reverse global warming.
The largest contributor to heat-trapping pollution in the United States is the burning of fossil fuels to make electricity. In fact, it produces about two billion tons of CO2 each year. Coal-burning power plants contribute the most to this pollution. Another big polluter is the transportation industry, which produces about 1.7 billion tons of CO2 emissions each year.
By knowing the ins and outs of global warming, as an oil and energy investor, you can figure out how to profit on it and put your money into the top-performing energy stocks.
Energy Investments to Be Cautious About
Since you’re a wise oil and energy investor, you want to be sure that your investments are going to be profitable now and in the future. When it comes to certain energy, perhaps you’ll want to steer clear of it entirely.
For example, although the coal industry is huge and many investors are making money off it right now, it’s predicted to become less profitable in the decades ahead. At the moment, one-third of all the energy in the world is produced by coal, and coal, a fossil fuel, is one of the biggest and most lucrative sources of power generation in the United States. Abroad, countries like China, Russia, Indonesia, and India are also producing a lot of energy from coal. The demand for coal will remain stable until at least 2022, but after that, it may go down due to its negative effects when it comes to global warming.
While the oil industry is highly profitable, and the oil companies pay out well for shareholders, they are some of the biggest contributors to global warming. Sinopec, a Chinese oil company, made more than $377 billion in 2018, and in the United States, ExxonMobil made more than $241 billion in the same year. However, companies like ExxonMobil and Chevron have received bad press for not doing enough to curb their practices that contribute to global warming. If you are an oil and energy investor who wants to invest in companies that are committed to sustainability, oil and gas corporations are probably not going to be your best bet.
When you’re looking at how to invest based on global warming news, you may want to avoid companies that do not produce gas efficient vehicles. For example, take a look at companies selling big SUVs and trucks as their main products. A car like the Infiniti QX50 only gets 20 miles per gallon, while a Nissan Frontier 4WD gets only 17 miles to the gallon. As people start to wake up to the negative effects of global warming, they’re going to be trading in their gas guzzling vehicles for ones that get more miles to the gallon. Since you’re a smart oil and energy investor, you should research car companies who are and aren’t putting out energy efficient cars.
Investing in Clean Energy
There are a number of ways that you, as an oil and energy investor, can make money off clean energy, boost your portfolio, and ensure that you’re investing in industries that are only going to grow and not decline. Many companies around the world are producing clean energy as well as products that are energy efficient. Let’s take a look at some of the ways you can invest in clean energy as an oil and energy investor.
- Invest in green car companies. A company that’s gotten a lot of positive press for its cars is Tesla, which produces electric cars. When you buy a share – which is around $316 – you’re also investing in solar panel manufacturing through Tesla’s subsidiary, SolarCity. Many investors like that visionary Elon Musk, who has big ambitions and has founded and co-founded successful companies like PayPal and SpaceX, runs Tesla. They believe in his vision and his dedication to curbing global warming. If you’re an oil and energy investor, you should look into purchasing Tesla stock before it shoots up. Another green car company you should consider is Toyota, which trades for around $121 a share. They created the most successful hybrid car of all time, the Toyota Prius. The Prius gets 58 miles per gallon in the city and 53 on the highway, and its sticker price is only $23,770 making it affordable for the average consumer (unlike the Tesla car, which starts around $74,500). Keep your eye out for other car companies coming out with hybrids and electric vehicles in the future.
- Invest in solar power companies. As an oil and energy investor, you want to have a diverse portfolio that includes solar power companies. These companies allow people to have power in their homes and not have to rely so much on the grid and fossil fuels. One of the leaders in the solar power industry is First Solar, Inc., which trades at around $52 a share. Wind and solar power company TerraForm Power is trading at $12 per share, and the stock is expected to go up in the future. Though TerraForm Power had a rough start when they went public, they are now making moves in Western Europe, which are predicted to be profitable in the coming years.
- Invest in hydroelectric and wind power. Other forms of clean energy include hydroelectric and wind power. As an oil and energy investor, you’ll want to look into companies creating hydroelectric and wind power like Brookfield Renewable Partners, which is at $30 per share, and NextEra Energy, which is at $188 a share.
Doing More Research as an Oil and Energy Investor
As a committed oil and energy investor, you want to do what’s right for your portfolio. You can do this a few ways. First, always stay on top of global warming news to see how it’s continuing to affect the different types of energy people use in their everyday lives. It’s also important to keep your eye out for companies making headlines with their energy innovations.
Another great idea is to subscribe to Energy Advantage Investor, a newsletter that is made for an oil and energy investor like yourself. It contains the latest information on the best investments to make in the oil energy space and tips on how you can make money in certain areas where nobody else has yet. Be on the forefront of energy investing with Energy Advantage Investor. All you have to do is sign up and check your inbox daily.
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