From the time you wake up until the time you go to bed, you are using energy – and plenty of it. Because it is all around us, you might be wondering if it’s a good investment; and if so, what types of energy are the best investment? Red on to learn more about it.
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Oil & Gas
For decades, oil and gas stocks have dominated the energy investment market. Though, they don’t come without risk. Oil prices over the last decade have been incredibly volatile, which can be a liability or an opportunity, depending on how you look at it. For example, prices soared past $140 per barrel in 2008, then dropped as low as $30 per barrel between 2014 and 2016. To invest in oil you can invest in individual stocks or a group of stocks called an ETF. Some popular ones include XOM, CVX, USO, BNO, USL, and more. And then there’s gas. Did you know that natural gas is the largest source of electricity generation in the US? Like oil, natural gas has also witnessed a lot of spikes and declines. If you’re interested in investing in this space then you may consider the following ETFs – UNG and BOIL, or individual companies – SU and CVN.
Uranium
This fuel is cleaner and more efficient than oil or coal and is used to power nuclear reactors. Because of this, in 2022 there were 55 reactors being constructed worldwide, with 440 in operation. Though, nuclear energy only provides 10 percent of the world’s electricity. One way to invest in uranium is to invest in the world’s largest uranium-mining companies like RIO and BHP. There are also ETF’s available like ARCA: URA, ARCA: NLR, and TSX: HURA.
Solar
If you want to go green on your investments, you’re not alone. In 2022, President Joe Biden signed the Inflation Reduction Act which calls for more than a $300 billion investment in energy and climate reform. This bill includes investments in renewable energy infrastructure like additional wind turbines and the manufacture of solar panels. Some popular solar stocks include DQ, CSIQ, HASI, RUN, ENPH, and ARRY.
Wind
Wind can be another excellent choice to add to your portfolio. Today, they power about 9% of America and has been backed by serious investment in recent years because they play a role in reducing carbon emissions. If you are interested in investing in wind energy, there are two categories of investments – wind turbine and component manufacturers and wind power producers. Some of the top wind energy stocks include NEE, GE, BEPC, and CWEN.