Would you buy shares in an energy company?

[Trillian]

Do you think it would be a good idea? I'm thinking that with the increasing costs of energy, that there would be a good return on the shares. But it kinda feels wrong to invest in someone who is sending families broke. But then I think that if I invest in them, at least I will get something back out of them - does that make sense?

[Lenny]

Yes Trillian. My DH works for one of these big evils (you know, pollution, greedy etc), and we have bought shares in them.

Although i don't have shares in banks, i think this is much the same. You never hear of banks having to sell their buidlings in mortgagee sales!

Oh, and the return we get on the 'evil' shares is not huge (because they keep expanding and buying more infrastructure) but the share price has steadily increased.

[Phteven]

I have shares in an energy company. I also have shares in a renewable energy company.

[Trillian]

LOL Lenny, I already have shares in mining and banking I have some money to invest for the kids and we're looking covering a few different areas - so we've got mining and banking, energy is definitely on the cards and then retail after that. Onyx, renewable energy is a good idea - I'll have to go and do a bit of research on that one.

[BellyBelly]

I second that - energy is such a debatable topic at the moment and there is much talk on renewable energy. Something we widely use today might be gone in the future, or not a major source of energy, if someone comes up with a more environmentally friendly, affordable option.... so I wouldn't invest in energy, perhaps renewable though

[Teeki]

I'd second investing in renewable energy - if you're worried about what your investment money is being used for at least you'd know it's being put to good use.

Another thing to consider, depending on how much you have to invest, is solar panels. I have quite a few farming customers setting up large panels on their sheds - they're essentially creating a solar farm. They don't use any of the power it creates, as it's separate from their house etc. So all power gets 'sold' back to the grid. It takes a bit longer to earn a profit because the outlay is higher, but in a couple of years they're looking quite good.

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[AnyDream]

I was mad keen to invest in wind power in the early 2000s - pity I had no $$ to put into it. I have no idea how the shares perform from a financial point of view, but logic says it would have to be a good idea. Watch what the shares are doing as the carbon tax announcements are made, that will give you a good idea of what the market thinks.

[Lenny]

Just bear in mind that wind and solar are very expensive and only viable at the moment with government assistance.
Unfortunately the cost of electricity is rising and the consumers are aghast at the cost - and this is using 'cheap' fossil fuels.
I also think that many of the electricity companies are already exploring renewable sources at the same time.

[Trillian]

I also think that many of the electricity companies are already exploring renewable sources at the same time.

That is what I am finding out too. It is in their best interest to do it really before they start losing money.

[mummydreamer]

if i had money to buy shares, i think the energy companies would be the ones to buy into! it sucks that energy prices are going to go up, but it's a fact of life i guess, and better you get some money out of it

[LionsandBears]

Personally, I don't buy one company or another. I purchase shares in an index fund, which spreads the risk across the market and usually gets a better return over the long run. For me, buying shares in an individual company is a bit much of a gamble, as you're dependent on one set of books and one set of managers and board members doing their job properly (Enron anyone?). Unless you're Warren Buffett. But then, if I had the money, I'd buy shares in Berkshire Hathaway and let Mr Buffett do my investing for me

On a side note, you can usually get a better return on your money buying shares in a bank than putting your money in the same bank's savings account.