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Go Green and Invest Ethically


Let your money follow your heart.

We like to think of ourselves as ethical investors all year round at Minyanville. But did you know this is official National Ethical Investment Week and an estimated $2.71 trillion can be characterized as ethical investments?

We checked in with the guy who wrote the book about it. He's Leland Hevner, president of the National Association of Online Investors, and author of The Perfect Portfolio: A Revolutionary Approach to Personal Investing.

Ethical investments, he says, can take the form of faith-based investments (companies that take a stance on something like Planned Parenthood), clean companies (non-polluters), and, finally, pro-active green firms (those that make green technology).

"In years past, so-called green companies have been rather exotic investments that attracted little interest among the investing community and did not fare particularly well in a portfolio," he says. "As an ethical investor you essentially had to suffer for your beliefs. Fortunately this has changed. Now investing in green technologies can not only make you feel good, it can earn you substantial returns."

At the moment, Hevner is most bullish on green companies dedicated to reducing the country's dependence on oil -- developing, manufacturing, and maintaining products in such areas as wind power, solar power, geothermal power, and advanced batter technology.

The current trends of higher oil prices, desire to reduce dependence on foreign countries for oil, and government stimulus investment in clean energy development bode well for the category, Hevner says.

How do you separate the good green from the bad?

"You've got to look under the hood to see what's there," Hevner says. "It's a real jungle unless you do something simple, like go with exchange-traded funds (ETFs)."

An ETF is an investment that owns a bundle of stocks just like a mutual fund, but can be traded like a stock.

While he has no position in any of these, Hevner is keen on PowerShares WilderHill Clean Energy (PBW), which is up 12% for the year through Oct. 29. He also likes PowerShares Global Clean Energy (PBD), which is up 22%, and First Trust NASDAQ Clean Edge Green Energy (QCLN), which is currently up 22% for the period.
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No positions in stocks mentioned.
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