Green Investing Risks
Lloyd Kurtz, a portfolio manager with Nelson Capital Management in Palo Alto, Calif., whose job involves aligning clients’ social ideology with their portfolios, warns against confusing dreams for a greener tomorrow with economic realities. Although they may offer upsides for the environment, a sharp drop in oil prices could quickly dampen the earnings prospects for many of these newly created green energy companies.
Kurtz also warns about pinning too many hopes and dollars on any one company’s prospects. "Remember all the [once-hot software companies] of 1985? Basically only Microsoft is left today. Don’t buy only one wind company, or one solar company. Buy them in bundles either through mutual funds or ETFs. Otherwise, there is just too much risk in the game," says Kurtz.
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