dimanche 18 janvier 2015

Energy Investing For Institutional Investors

By Kristen Baird


Fossil fuels are used in many power stations around the world to generate electricity. Sources of fuel encompass the more tradition kinds. These include crude oil, coal and natural gas. Harnessing wind, solar and ocean wave sources to generate electricity is becoming more prevalent and popular due to their renewable qualities. The sector forms the cornerstone of all modern nation states. Energy investing is part of most balanced investment portfolios.

Coal burning power stations are used in many countries to generate electricity. Many appliances used in residential houses, in a myriad number of commercial related businesses and in industrial complexes will simply not function without electrical power. Electricity is critical to modern day infrastructure and to the proper functioning of everyday activities by all. Any serious disruption quickly leads to gridlock and chaos.

Fossil fuels such as crude oil are extracted from both the sea and on dry land. This critically important resource is used in many everyday products after being refined. Many people are simply not aware of many of the applications of refined crude and the uses made of its derivatives by industrial processes. Hair oils and car tires are typical examples of derivative products used by many people in society every single day.

Heating oil is a derivative product of fossil fuels. It must be refined in order to heat, mostly homes built in earlier times. The more recently built housing stock are mostly heated by making use of electricity and natural gas in burners. Whether residential real estate buildings utilize heating oil, natural gas or electricity, fuel bills vary seasonally.

The energy sector is one amongst many other sectors in financial markets. Investors can buy shares or exchange traded funds in all the sectors that make up modern economies. Some of the other sectors focus on retail, health care, technology, utilities and transportation. The diverse nature of financial markets gives investors more choices.

Institutional and retail investors who put money to work in the power generation related industry have various routes they can take. Some invest in retirement funds that focus only on the power related sector. Others buy stocks in energy related business entities. These stocks are issued by specialist companies that earn income from activities in crude oil extraction, refinery, exploration, tanker operations and other specialized processes.

Exchange traded funds are often the investment vehicles of choice used to gain access to many companies within the various disciplines. These disciplines include the power sector. These exchange traded funds are believed to spread the risks of investing more evenly than buying shares in any one company. They have become increasingly popular. This is confirmed by the increasing amount of money flowing into these types of investment vehicles.

Many renewable and non renewable sources of fuels are used to generate power used for electricity generation. Renewable sources of power include wind, solar and ocean wave elements. Crude oil, natural gas and coal are the more traditional and non renewable fossil fuels used in power generation. Financial markets offer investors opportunities in all the segments that contribute to modern economies. Shares and exchange traded funds are popular investment vehicles.




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