Long-only positions in capital assets such as bonds and stocks or, for whatever reason, cash is outdated stuff now. Nearly everyone is looking at alternative assets and asset classes for over a decade now. And no, it’s not limited to gold and bullion. Alternative investment strategies have proliferated of late as more and more people become financially literate throughout the world, and wake up to realize the fragility of typical currency, stocks, and bonds.
But what are these alternative assets? The fairly amateur will name the obvious ones, such as real estate, commodities, and structured products. The more seasoned investor looks into private equity, private debt, and hedge funds. Some are inclined toward other asset classes purely because of their interests or knowledge, such as cryptocurrencies and collectibles.
When done right, all of these can provide a respectable return on your investment. The strategy is influenced by where you are, how much you invest, what you invest in, and of course, your skill and experience.
What if we told you that there’s another asset class worth exploring? An asset class that improves the world around you, is clean, and scales gracefully into the future? This is the power & energy asset class.
Specifically, power alternative investments mean investing in companies that manufacture and manage power and energy products – including green and renewable energy.
The energy infrastructure of the world is its backbone. People can live without the internet for a few days, without roads for a few weeks, but not a single day without power and energy.
Power and energy companies are built to fuel the world. Without them, the world would be a dark and cold place (or hot, depending on where you are). Power companies continually improve their systems in order to maximize their efficiency.
With the recent headways made into renewable energy and green energy, technologies that aim to make our world more sustainable than ever, energy companies are seeing an all-time high interest from investment families, large corporations, and other investors.
Investing in power isn’t simple, however. As we’ll see in the next section, it requires fundamental technical analysis and a good grasp of both, new and emerging trade ideas. Sufficient comparable analyses might not be present in all cases, for all categories, or in all regions – and you have to rely on experts.
Risk management is also pretty crucial here because otherwise, your entire principal might become zero.
How to Plan & Execute an alternative Investment Strategy in Energy and Power?
The energy infrastructure is built up of global gas markets, natural gas and energy futures and options markets, and so on. This is complex territory – and you need to tread carefully. Unconventional and constantly challenging, investing in power to derive a high ROI requires rigorous research.
Often, it’s better to leave it to the experts. e360Power is one such group of experts, in business since 2009.
With a bunch of alternative investment strategies under the hood, e360Power capitalizes on market insight and thorough research to determine the winners and losers for their clients. Their investment approach is second to none, and incidentally, they have built quite a reputation in the market – by making money for their clients in a hassle-free way.
Looking Further: Carbon Credits
Apart from investing in power and gas, you can also invest in carbon credits using the compliance carbon market. Carbon credits are government-issued certificates that allow polluting companies to emit one ton of carbon dioxide. If a company doesn’t end up using all its carbon credits, it can sell them to other companies.
Carbon credits aim to positively reduce the amount of carbon dioxide produced and regulate it in some way.
Where do investors come into the story? Well, carbon credits aren’t just limited to polluting companies. Anyone can buy and sell them. There are many emerging opportunities in the carbon credit investment market. Since the last 2-3 years, this market has exploded with interest, seeing an ever-increasing number of powerful investors choosing it as a respectable slice of their alternative assets portfolio.
But again, the help of an expert is highly warranted. Specialist firms that deal in carbon credits can predict better as they track the global carbon credit market.
E360Power again comes into the picture. Apart from gas and power – they also specialize in the carbon credit market.
Power (such as electricity), energy (such as gas), and carbon credits are all markets with futures and options. With a fine-tuned investment strategy, these can become a sizeable chunk of your investment portfolio.
Anyone who wishes to go beyond the normal asset class (stocks, cash, bonds) and conventional alternative assets (hedge funds, private equity, real estate, commodities, collectibles, cryptocurrencies, etc.) can look into these assets.
They are emerging markets, meaning investments can be pretty challenging but remarkably more incentivizing. The pursuit of higher ROIs alone will not be sufficient, however. You need expert guidance and help – handholding, even, in the first few weeks when you learn the ins and outs of the trade.
Plus, you need to constantly learn and unlearn stuff because of the ever-changing nature of these markets. Regulations today might become obstacles tomorrow, and a new disruptive company or tech innovation might change the game in a big way.
Still, trading and investing in an alternative asset class is a science. And that applies to this class too. With the correct maths and analysis, you can win big too.