The ABCs of ETFs
- Written by Marc Courtenay
- Friday, 19 February 2010
Investing primer: The pros and cons of different funds
Why invest in a fund, a cluster of stocks, rather than the stocks themselves? The reasons are twofold.
First, a fund provides cheaper diversification for those investors with smaller amounts of capital. Buying each component of a fund spreads out your risk in the same way, but you can rack up significant brokerage fees in the process.
The second reason is true for most investors across the board: some funds can get you into sectors that otherwise present significant hurdles to play. Examples include the commercial real estate sector or the convertible bond sector, since regular retail investors would be hard pressed to purchase a commercial building or to participate in a convertible debt financing.
Many different types of funds beckon to investors now, and knowing how they work will help you maximize your gain from them. We’ll highlight three to set up the fourth: open-end funds, closed-end funds, hedge funds, and the one we like now to balance risk and reward, exchange-traded funds (ETFs).
Add a commentFavorite Geothermal and Nuclear Energy Plays
- Written by Marc Courtenay
- Tuesday, 16 February 2010
The photo above is of the Diablo Canyon nuclear power plant, located on scenic Avila Bay, California.
Today President Obama outlined more details on his desire to build nuclear energy plants. He said he wants us to catch up with countries like France who gets a much larger percentage of their electricity from nuclear energy. The president also stressed his determination to invest in more solar, wind, and geothermal "alternative energy" projects.
This will create new jobs and keep the U.S. from having to import the alternative energy technology. It will eventually make America less dependent on foreign sources of energy. On this news, solar energy companies like First Solar (Nasdaq:FSLR) moved up over 5%. The Claymore/MAC Global Solar Energy ETF (NYSE:TAN) charged ahead almost 5% today.
My favorite geothermal energy company, Ormat Technologies (NYSE:ORA) had a good day, moving up over 2%.This is an exciting time for all kinds of energy plays, including natural gas. But the true "alternative" sources, of which some believe uranium-fueled sources are "alternative", have the kind of attention that makes "green energy" enthusiasts feel they are having their day in the sun.
By the way, there are two ETFs that invest in the major players in nuclear energy. There's the Market Vectors Nuclear Energy ETF (NYSE:NLR) and the PowerShares Global Nuclear Energy (NYSE:PKN). Their holdings give wide exposure to producers and to utilities.
Add a commentWill Obama Destroy Any Hope of U.S. Energy Independence?
- Written by Marc Courtenay
- Thursday, 11 February 2010
The U.S. consumes nearly three times the amount of oil that it produces domestically on a daily basis. How can this statistic get any worse, you might ask?
Imagine in 2010 the Obama administration persuades Congress to pass a budget that results in a reduction of domestic oil production by 10% - 20%, making the supply/demand imbalance even more lopsided. Foreign oil companies will gain a distinct advantage over American domestic operators as an unintended consequence of these proposals.
Sound farfetched? It’s closer to reality than you may think… If it comes to pass, it will likely be the biggest structural change in the U.S. domestic oil and gas industry in decades and have far-reaching implications for investors and for the entire country.
Add a commentFour Commodities... Four Ways to Profit
- Written by Marc Courtenay
- Wednesday, 10 February 2010
Editor's Note: Commodities are always "Green" to us because the world can't live or function without them. We prefer that commodities be mined or grown in an environmentally sensitive way. To vote "green" and to invest with a green conscience, choose commodities or companies that demonstrate environmental concern and responsibility.
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So much for the oil rally.
The market started 2010 in blazing fashion, with March oil futures tagging $84 a barrel. Next stop: $100, right? A price not seen since the fall of 2008. Not so fast...
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