My investment portfolio is 100 % long only — I don’t have short positions, nor do I aim at short term speculative gains. Because of this, I have been interested in green ETFs for a few years.
During the last year, my green ETF investments have not been very successfull. On the other hand, very few of my investments can show a positive growth for this year. At the same time, I’m sure the present bear market will not continue for years and will provide investors with good chances to buy stocks and green ETFs at discount.
One of the green ETFs I decided to sell a few months ago was Guggenheim Solar ETF (NYSE:TAN). The decision was not based on any fundamental change in my opinion regarding the long term potential of the sector which I still believe in — the decision was based on possibility to deduc the losses from taxes I have to pay. Moreover, I plan to add the either the very same ETF or another green energy ETF to my portfolio later this year.
At the moment, several small solar panel manufacturers in the USA are in difficulties. According to Tom Lydon, “the solar sector is turning into a cutthroat industry” because of the high production that has flooded the solar panel market lately. In addition to US manufacturers, foreign companies have been very active in the solar business.
For some investors, this might be a good reason to turn away from solar and other green energy ETFs. For others, like me, the higher competition simply means that the surviving companies will be fit and profitable in the future. And that will ensure there still is long-time growth potential in the solar sector.