Coal mining has had an extensive history on our planet. The Industrial Revolution of the 18^th century was directly based on the ability to mine coal in massive quantities. Modern techniques involve surface mining, which takes advantage of exposed coal seams on the surface, area mining, which blasts open earth to get to the coal, and the controversial mountaintop removal mining, which essentially cuts off the top of a mountain to get to the coal. Although labeled a dirty source of energy that alternative energy industries seek to replace, coal is still a major part in modern everyday life. This could make investing in coal a lucrative option.

The filthiest of all energy sources, coal emits hazardous pollution when it is burned, but energy is scarce around the world and gas and oil prices are always on the rise. Coal is proving to be a cheaper, more reliable energy source and is being used all over the world. In the United States, coal accounts for as much as 45% of generated electricity which is nearly twice the electricity that natural gas produces. Recent legislation even encourages clean-coal technologies, which means that the demand for coal will stay around, at least for a while.

Coal ETFs come with plenty of advantages. ETFs are cost-effective, they come with lower capital gains taxes, there are derivatives involved, and an ETF can be purchased with a single transaction. Coal ETFs have plenty of flexibility and prices are updated throughout the day just like stock market equities. The passive management and strong accountability factors make ETF investments attractive, and the immediate dividends are almost irresistible. Coal ETFs can be used as a hedge to cut down on portfolio risk. With any investment, it’s a great way to diversify your portfolio and exposing you to the energy sectors, which could lead to diversification into the alternative energy sector.

Of course, with any investment, coal assets are potentially risky. Buying opportunities for coal currently exist because people are becoming more energy conscious and coal has gone into a surplus, meaning that supply outweighs demand right now. This could mean buying coal investments at rock-bottom prices, or could be an indicator of a bear market. It’s up to the individual to decide and go with his or her intuition. Consider other energy ETFs if you are in the market for investing in energy, and consider renewable energy sources as demands rise.

On March 13, 2012 By Richard Wilson

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Investing in Coal – Tips for Investing in Alternative Energy

As prices of oil and gas keep rising, businesses and governments alike are looking for cheaper, more efficient forms of energy. This can be interesting to investors who want to take part in the alternative energies market. One form of alternative energy that is receiving more attention from the financial industry lately is coal. The use of coal as a form of energy is nothing new, but in today’s world, investing in coal can be a good idea because it is considered to be a cleaner form of energy than other alternatives. This is due to the passing of the Waxman-Markley Energy Bill, which rewards businesses and governments for using clean sources of energy, such as coal.

The financial incentive that is derived from this bill will keep the demand for coal high, because more and more countries are going to be looking for new forms of sustainable energy. Another reason why investing in coal is considered to be a sound opportunity is that historically, much like gold, it is seen as a stable commodity. Investors are usually encouraged to include some stable commodities in their portfolio as well as more risky propositions, for a balanced financial outlook that will make them money at a slow and steady rate.

The demand for coal is growing all over the world, including large countries such as China and India. By investing in coal, you are investing your money in an international product which will be able to withstand the changing markets of your home country. It’s better in unstable economic times to look at international stable properties, such as coal and gold. A coal ETF can be used as a way to hedge foreign risk. It is also a good way to gain some beginning exposure to the alternative energy market, before investing in new and risky businesses.

The disadvantages to investing in coal are the same as in any other investment, in that there isn’t any investment that comes completely without risk. Yet if you pay attention to the market and are able to conduct research to see where coal is thriving and what predictions are being made, you can ride the highs and lows of the market with a fairly stable portfolio. It can be helpful to watch some major coal ETFs with the help of investment professionals before you buy into any of them, so that you can gain a greater understanding of market conditions.

On March 12, 2012 By Richard Wilson

Practice Test

Investing in Coal – Are Fossil Fuels Still a Good Investment?

Investing in coal has become a topic of discussion lately as the federal government has started to invest more in finding alternative sources of fuel. Another thing that has brought investing in coal in to the national spotlight is coal mine accidents. But before you write off coal as a stable investment, there are some things that you should take into account. As with any investment, you need to do plenty of research before you start getting involved in something that you may not be totally familiar with or you could lose a lot of money. When you start taking a more comprehensive look at the coal industry, you will see an industry that is changing but hardly becoming obsolete.

One of the things that have slowed the pace of people investing in coal is the publicity created by the recent rash of coal mining accidents. These accidents are occurring all over the world and creating a fear that a hot spotlight will create expensive regulations. It is important to remember that coal is abundant all over the world. There is no rush to slow down the coal mining industry. The recent accidents have actually helped anyone that is considering investing in coal to start to realize a better return on their investment. There have always been safety regulations in place for coal mining. The recent accidents have escalated the need to enforce those rules. Companies that have remained compliant with federal mining regulations offer a significant investment opportunity.

Millions of people rely on coal to generate electricity, which is the main purpose of mining coal these days. The growing need for electricity makes investing in coal a very smart idea. Any alternative fuels will take decades to research and put into action. Investing in coal now will allow you to realize the returns of what continues to be one of the most highly sought after fossil fuels on the planet. It is possible that someday solar or wind energy could threaten the stability of the coal market, but that will not be for a very long time.

Investing in coal is safe because the need for electricity is growing. While countries work to find alternatives to coal, they also continue to build coal-burning power plants. If you are investing in coal, then you are investing in one of the primary sources of electricity for millions of people all over the world. Coal will remain a stable investment for a long time.

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Investing in Coal – Things to Consider

Investing in Coal – Tips for Investing in Alternative Energy

Investing in Coal – Are Fossil Fuels Still a Good Investment?

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