Guidelines For Green Investing

October 7, 2009 · Posted in Green Business, Green Technology, Green Venture Capital 

il disco si apre
Creative Commons License photo credit: euzesio

It may be time to start loading up on some of those “green” companies, the environmental friendly corporations whose products we will be legislated and socially driven into using whether we want to save the planet or not.

There’s that annoying little voice again telling you that even though your investment portfolio seems to be slipping deeper into despair, the bargains are out there and a little bit of research is sure to uncover your next home run. It may even be time to start loading up on some of those “green” companies, the environmental friendly corporations whose products we will be legislated and socially driven into using whether we want to save the planet or not.

Unfortunately, if you’re like most Americans, your green experience has been limited to lugging those bottles down to the recycling center and changing a few light bulbs. In that case, you may have some difficulty knowing where to begin. Let’s face it – how many of us are really up on the latest silicon technology that is impacting the solar industry?

Peter Lynch, the man who helped put Fidelity Investments on the map, is famous for saying “Invest in what you know” by utilizing your “local knowledge”. The local knowledge is those few things we have some expertise in. Supposedly all of us possess this expertise (although I have doubts about some of my neighbors) and can apply it to our investments selections. If Peter Lynch can pick up some of his best ideas by following his wife and daughter through the mall to see where they shop, I see no reason why the rest of us can’t start “green investing” by looking at the products we already use. From automobiles to household cleaners, there’s a world of Green out there waiting to be put to the test.

Of course no test is worth much of anything without some studies behind it, and there’s no lack of them where selling the planet friendly is concerned. Using them as a guide helps shorten the path of research leaving a smaller virtual carbon imprint.

Pricing and Quality

A green product should function as well as a non-green product without any sacrifice in quality. Price can be at a premium, but there should be a perceived value that compensates for the pricing consideration. The Toyota (TM) Prius, the best selling global hybrid automobile, has recently reached sales figures in excess of 1,000,000 units. Even with a recently announced price hike, here is a prime example of a finely tuned balance between pricing and quality. With demand outstripping supply, its little wonder that Toyota says it will have a hybrid engine available on all its models by the year 2020.

Basic Need

Green companies must meet a basic need. Environmental friendly should be considered an added feature. With apologies to Kermit, a company producing leashes for pet frogs is no winner regardless how green.

Convenience

Remember chlorofluorocarbon gases? These were the propellants used in hairspray until banned because of the suspicion they were partly responsible for the depletion of the ozone layer. They were replaced by hydrocarbons like butane and propane, but that use decreased when a number of states began a move against them because of air pollution. Today, chemists continue to experiment with a variety of propellants that can be used in the aerosol can. But, why use the aerosol can at all when companies can market alternatives like the “greener” manual pump? Answer – most consumers prefer and use aerosol.

The Shelton Group, an advertising agency specializing in energy and sustainability did a national study, called Eco Pulse that asked about green issues. When consumers were asked to choose between their comfort and the environment, 46% chose their comfort over the 31% who chose the environment.

For a green company to be successful, it helps to recognize that at heart we’re just a bunch of lazy self- indulgent people. Peter Lynch knew this when he made a pile of money on Taco Bell.

Green Credentials

The old adage is you’ll never win an argument about politics and religion. Today you should add, “what’s a green company” to that list. It’s widely accepted that a company doesn’t need to be perfectly green, but beyond that, you’re on your own.

Turn for a moment to Wal-Mart Stores, Inc. (WMT), the superstore a lot of folks love to hate (at least in their own back yards) for its large scale development and the problems which ensue. This is the same Wal-Mart that is the nations second largest distributor of organic foods (behind only Whole Foods Market (WFMI), regularly revamps stores for increased energy efficiency and has major initiatives for supplies to produce eco-friendly goods.

Is Wal-Mart Green? Its Chief Executive, Lee Scott, says Wal-Mart is a “good steward for the environment and will ultimately use only renewable energy sources and produce zero waste.”

Critics contend that the size of a Wal-Mart Supercenter in terms of store and parking lot size alone contribute to so much spoiled acreage and water pollution, that Wal-Mart can never be truly green.

Like a consumer deciding to shop at a particular store, its up to the green investor to decide whether a company is “green enough” to meet whatever standard is applied.

So the next time you pick up a green household cleaner, apply some of the techniques of Peter Lynch and the guides used above. Who knows- if your ship comes in, maybe you’ll be able to finally afford that wind powered yacht (read sailboat) you’ve been dreaming about.

Glenn “Chip” Dahlke, a Senior Contributor to the http://www.LivingTrustNetwork.com has 30 years in the investment business. He is a Registered Representative with LPL Financial and a principal with Dahlke Financial Group. He is registered to transact securities business with persons who are residents of the following states: CA. CT, FL, GA, IL. MA, MD. ME, MI. NC, NH, NJ, NY.OR, PA, RI, VA, VT, WY. Securities offered through LPL Financial. Member FINRA/SIPC. Contact him at chipdahlke@dahlkefinancial.com or at his office in Lyme, CT (860) 434-4261. You may also contact him at the http://www.LivingTrustNetwork.com if you wish.

Copyright 2008. Living Trust Network, LLC. All Rights Reserved

Tags: , , , , , , ,

Comments

Comments are closed.

Powered by Yahoo! Answers