by Brian McKay
Energy has long been a popular source of investment, but what is it that makes it so attractive? If you’ve been looking for an opportunity to make a return on your money, here are just several reasons why investing in energy could be a good option.
Energy is always in demand
Our modern lives depend on energy whether it’s gas for heating or electricity for powering our appliances or fuel for vehicles. Modern households consume much greater amounts of energy than ever before, whilst businesses and public services require even bigger supplies of energy. This demand is continuously growing – according to the International Energy Agency, the demand for global energy will rise by more than 30% by 2035. Compared to certain other industries, there’s a stability that makes energy appealing. That of course isn’t to say that there aren’t still risky ventures to be had, however overall the industry has no future signs of dwindling – unless we go back to living a medieval lifestyle, the human race is always going to need energy.
Energy has some of the highest revenues of any industry
9 out of 10 of the world’s highest earning companies are energy-related. It’s the highest valued industry on the planet. This can make investing in big companies a secure venture for many people. Growing demands for energy mean that the industry will only continue to boom – investors are constantly needed to supply this demand. In fact, the world must invest $37 trillion into the energy sector if it hopes to keep up with the demand. The result is no shortage of investment opportunities to choose from with huge potential returns. In the last decade, returns in energy investment have been above average compared to other sectors - this trend is thought to continue.
There are a diverse amount of ways to invest
There are so many different ways to invest in energy. You can invest in company shares or you can invest in something physical such as a barrel of oil or your very own wind farm project. You can also choose a specific cause that can help you to feel good about your investment – you could help fund fuel for public transport or you could invest in a local renewable energy start up and contribute to fighting global warming. There are even personal investments involving energy that can you to make a return in the long run simply by saving money on energy bills – for example, getting solar panels fitted on your roof. This diversity makes energy suitable for every type of investor - whether you’re frightened of stocks or dedicated to ethical investing, there’s certain to be an opportunity out there for you.
It’s easy to do your homework
Being such a huge area of investment, there are lots of sources online that can help you to do your research before getting involved in energy. Whether you want to look up crude oil inventory or better get to grips with solar power, you’ll find plenty of sites online for gaining a better understanding. Energy is often a hot topic in many investment magazines and blogs, so it’s simple to keep up with trends. Brokers also tend to have a good knowledge of this area, which could be handy to know if you plan to use a broker. The main advantage of investing in the energy industry is that insights are generally based on logic – this makes it easier to decide when to invest to get the cheapest rates and highest returns. Whilst the likes of cryptocurrencies and financial stocks are hard to predict, energy prices generally follow a clear pattern with only the occasional anomaly thrown in. This can make it feel less like a gamble as you can understand why prices are rising and falling.
You can invest on any budget
You don’t have to be rich already to invest in energy. Whilst there are big investments out there for those with money to spend, a growing number of affordable opportunities have sprung up in recent years. Crowdfunding and mutual funds are a good way of accessing high return investments on a budget – by teaming up with lots of other investors, you can all put your money together and buy a share or invest in a project that would otherwise be too expensive alone. ETFs are another investment strategy that has become popular in recent years – these are funds that are set up by brokers that rise and fall with the fluctuating prices of stocks and can be bought much more cheaply. By getting involved in these types of investment, you can still reap the rewards of the energy industry without having to risk huge amounts of money.