Investment: The stock market – Going green

The green economy covers a vast range of products and services that improve human well-being in a sustainable manner. Basically, the green economy strives to ensure a good standard of living for today’s citizens in a manner that will not compromise the standard of living of future generations. This can be accomplished by simply producing and consuming more sustainably.

In practice, the green economy consists of technologies and infrastructure for clean energy, clean transportation, sustainable agriculture, sustainable water and waste management, green buildings and green industry. Another absolutely essential constituent of the green economy that people often neglect is the social engineering which aims to get people to consume more sustainably by breaking the highly destructive perceived link between consumption and happiness. We will need to make great progress in both the high-tech (technological) and low-tech (social engineering) sectors if we are to achieve sustainability before it is too late.

From an investment point of view, the green economy is the one and only sector which I can confidently say will grow in the long run. The logic behind this is very simple: if the green economy does not rapidly expand in the face of rising demands on our increasingly limited supplies of cheap energy, food and water, our civilization will most certainly collapse. It is therefore safe to say that we will either see massive long-term gains in green stocks or massive long-term declines in every stock on the planet. I choose to believe that we will see the former.

That being said, however, investing in green stocks does carry some medium-term risk. The world is still totally brainwashed by unthinking consumerism and, in hard economic times such at those we find ourselves in today, green products and services are among the first areas to suffer simply because they are generally more expensive than unsustainable products and services. For the medium term therefore, green stocks should be seen as an ethical investment rather than a growth investment. There is absolutely no doubt that green investments is the right thing to do, but unfortunately there is no guarantee of great returns over the next few years. Unless something terrible happens, however, large returns are all but guaranteed over the next few decades. 

The good thing is that investment institutions are starting to wake up to the fact that green investments really are the only logical choice and green funds accepting private investments are emerging everywhere. Do some searching on the internet to find the sustainable investment fund that would be best suited to your needs.

So, that is the philosophy behind green investing: ethically correct in the medium term and highly profitable in the long term. And remember; the market works on perception. The green bull market will therefore only begin when a significant number of ethically sound or long-term savvy investors have already given this vital sector a big financial kick-start. Really, the sooner we can start the green bull run, the better for all of us.

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