If you’re looking to invest in water, then a water etf is a great option. If you did a double take at the concept of investing in water, we don’t blame you, but water is actually emerging as a very important investment for many traders. Think about it, markets are defined by supply and demand. Demand for water is immense. We need it to drink, industries need it for a huge range of industrial applications, and agriculture consumes vast amounts of water each year. After all, plants and livestock have to drink too, right?
At the same time water is a scarce resource. Or at least fresh water is. Salt water is available in massive and easy to obtain quantities, but it’s useless for drinking, agriculture, and most industrial applications. Salt water covers 70 percent of the world’s surface, but without expensive refinement to remove salt, it’s not very useful.
Fresh water, on the other hand, is relatively rare. In fact, fresh water makes up less than 3 percent of the world’s water supplies. Think about that, the entire human civilization relies heavily on fresh water, and yet it makes up only a tiny, tiny portion of the water available. Demand is thus very high, but supply is quite limited.
As such, an increasing number of traders have been investing in water. In order to do so, water based ETFs are perhaps the best tool available. These water mutual funds allow investors to invest in H20 without having to try to figure out ways to store massive amounts of water.
You could go out and buy tankers full of water and then store it, but that’s a huge hassle. Instead, you could buy water etf or another financial tool.
So What Is A Water ETF?
Water ETFs don’t track the price of water, and many of them do not focus on investing in water utilities (which is another great way to invest in water). Instead, water etfs usually focus on investing in companies that make equipment that is used to refine and purify water. They also often invest in companies that conserve, purify, and treat water.
The United Nations estimates that demand for water is growing at about twice the rate as population growth. Given how quickly the population is growing, this means demand for water is growing very quickly! And when demand is growing, there are opportunities to make sound investments that will generate substantial profits.
As demand for water increases, companies that work in water-technology could see their stocks rise. This, in turn, will lead to the increasing performance of the ETF itself. Of course, the performance of individual ETFs and companies will come down to more factors than rising demand for water.
What are the best water stocks?
Want to invest in water stocks? There are many ways to do so. You can invest in companies, like General Electric, that are working on desalinasation technologies. These technologies help countries and people refine salt water, making it drinkable and usable in other applications.
You can also invest in water utility stocks, like American Water Works or Middlesex Water company. These utilities provide water to communities, meaning they take water, make it drinkable or usable, and then deliver it to people and companies through pipes and other measures.
With populations growing and the world economy advancing in terms of technology and wealth, demand for water is only going to increase. This means that you may be able to lock up some big gains by investing in water stocks.
When investing in water stocks, or any type of stock, it’s important to do your own research and build your own insights. We can’t tell you which water stocks to invest in specifically, but the ones mentioned above are definitely worth looking at. You should also consider Aqua America, Connecticut Water Service, and American States Water Company, among many others.
Conclusion: Water Investments Worth Consideration But There Are Some Risks
Many major investors and hedge funds are investing in water stocks and water related technologies. That’s because they know that demand for water is only going to grow. As an investor, water should definitely be considered when looking for ways to diversify.
One thing to remember is that a large number of people and companies are already working on water desalinisation technology. This is very important because if someone creates a very cheap way to take salt out of water, it could have a negative impact on some water-based investments as water will no longer be a scarce resource. Of course, if you were to invest in the company that does discover a way to cheaply and easily desalinate water, you could lock up some huge gains.
Anyways, now you know how to invest in water. You can choose a water ETF, companies that are working on water technologies, and other water stocks.