BY PHIL HANDS
Venture abroad: European
companies set the pace in development and deployment of green technology. Many
are more profitable than their fledgling U.S. counterparts.
Eggs in many baskets: Rather
than invest in individual companies, consider a mutual fund that has holdings
in variety of large and small green-oriented industries. For example, the New
Alternative Mutual Fund holds stock in clean biotech industries and a number
of 'small-cap' green technology startup firms. Mutual funds spread your risk
across many companies, a safer bet than risking the nest egg in one company
or startup.
Research relentlessly: No
universally recognized agency certifies that a company or mutual fund is as
green as its claims. Always thoroughly check out green claims, and also look
at stock or mutual fund performance to get a sense of the level of risk involved
in any investment.
Size matters: Smaller, newer
green technology companies may be riskier investments. Larger, more established
firms may be more stable and more diversified, but less likely to be truly as
green as smaller, 'pure play' companies focusing on one specific industry, such
as wind or solar power. Again, assess the risks.
Understanding 'best of breed':
This term refers to a company that has the best environmental record in its
industry. But it's all relative: An oil company can be best of breed but may
not be anywhere near as green as a solar power company, for example.