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Tuesday, April 17, 2007

A Greener America - What does that mean for my portfolio?

The United States Supreme Court ruling on regulating greenhouse gases in an effort to curb global warming is unprecedented news! In a sharply divided judgment, the court ruled Monday that greenhouse gases are pollutants, and so the federal Environmental Protection Agency was wrong to say it had no mandate to regulate such emissions. The decision dealt a new blow to the administration of President George W. Bush, which is steadfast in refusing any limits on US industry or on its gas-guzzling cars, arguing it could hurt the country's economy. So what does this mean for my portfolio? Should I lose my gas/oil stocks? I dunno. That's for you and your financial planner to decide. However, this ruling makes for an interesting situation. For the first time in history, the United States is stepping up to the plate to hedge global warming, which is good for alternative energy stocks! Be on the lookout for FuelTech (FTEK) and Covanta (CVA). FuelTech helps coal power plants save money and emissions by cutting down on furnace residue. Apparently, sludge in these coal furnaces really reduces the efficiency of the burning process and results in higher pollution. The company already has contracts with 30 power stations, and it's growing fast. The stock is currently $25.70. Covanta takes trash and makes it into energy. How smart! However, be careful because this pick is especially speculative. In fact, with both of these stocks, you should watch them for a while. Do some homework. However, I think the concepts are good, especially now that it is going to be cheaper to use alternative fuels. This is only going to fire up the alternative energy industry. Or, if you want to play the sector, which is probably smart at this point because many of these stocks are so speculative (but you know the industry/sector is going to be strong), you should look for an alternative energy index fund. This way you can play the game without researching every single alternative energy stock out there. Until next time, keep your eyes on the alternative energy sector for some big moves.

Please consult your financial advisor before acting on any recommendation.

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