Updates to "should I invest now?"
The more you search, the more you find. Actually right now everyone is asking the question, should I be investing in alternative energy stocks? This is because of the renewed level of intrest brought on by higher gas prices and additional external forces like Katrina and Rita.
As I stated in the past, you need to be careful during times like these. If your a trader, than feel free to play as much as you want.
MarketWatch had an article yesterday where they interview Rob Wilder the creator of the WilderHill Clean Energy index.
Fuel to the Fire
In a mark of how much interest is being given to this often volatile and speculative sector, the PowerShares WilderHill Clean Energy Portfolio almost tripled in assets, to $150 million from $55 million, since Hurricane Katrina hit the Gulf coast three weeks ago and energy prices shot higher.
. . .
As for investing in the sector, Wilder himself is quick to point out that investors should be aware of some important caveats. For example, high oil prices tend to cause a rush to alternative energy companies, but that can reverse when prices ease.
"We're tracking a very volatile sector, with lots of small caps that are in very emerging technologies," he said. "Wind is here now, solar is getting there, too, in terms of economic viability. Still way speculative are hydrogen fuel cells. [ more ]
I agree with many of his points. Sector investing (which is what I'm doing with Alt E) is risky business. I feel like the long term rewards are worth it, but I'm not dumping a bunch of money into the market right now in my personal or mutual fund portfolio in this sector. I feel the risk/reward ratio is heavily waited in the risk category. I prefer to find good entry points in stocks at reasonable levels. These entry points maybe occurring now, or several months from now. I'm in this for the long term and I'm on the constant lookout for these entry points.
p.s. Keep in mind I also thought it was stupid to be buying Google at $200 and it now sits at over $300, so do your own due diligence and keep in mind this is only one person's opinion.