How to Invest in Wind Turbines

Many people are looking at the current energy crisis and seeing an investment opportunity. There is little doubt that the energy situation in the country--and the world---needs to change, and alternative energies like wind turbines and solar panels are likely to lead that energy revolution. There are a number of ways investors can profit from the future of energy, but it is important to research those investments carefully.

Determine how much of your portfolio you wish to devote to wind power. While alternative energy sources like wind and solar power have great promise, the sector carries its share of risk as well. Diversification is important when investing in the stock market, so it is best to devote only a small portion of your total stock market portfolio in any one sector.

Consider purchasing an ETF that invests in the wind power sector. This strategy can be less risky than purchasing stock in a handful of companies that design and build wind turbines. An ETF is an exchange traded fund, a mutual fund that trades in real time during the day just like a stock. One such ETF trades on the NASDAQ market under the ticker symbol PWND.

Look for mainstream energy companies that are making a bet on the wind power market. There are a number of these energy companies on the market, so it is important to research each company and make an investment decision based on the fiscal soundness of the company. That means reading the annual statements and SEC filings of the company, evaluating levels of long term debt and prospects for future growth. Another option is to invest in a mutual fund or ETF that is dedicated to the power generation industry.