Investing in Water for Beginners
Why Investing in Water May Be a Smart Choice
As you know, over 70% of the world is made of water. However, you may be surprised to know that 97% of that water is undrinkable saltwater. Today, only 1% of the water on this planet is easily accessible freshwater. The other 2% of the water supply is freshwater that is trapped underground. Here is a look at three other reasons to consider investing in water.
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1). The world’s most important resource
Water is our most important resource. Every single human on Earth needs fresh drinking water in order to survive. Additionally, water is needed for other purposes such as agriculture and production.
2). Increasing scarcity
As the planet uses up the available freshwater, the overall supply has become more constrained. Also, droughts in certain parts of the world have created a water supply crisis in major popular centers such as the Southeastern United States.
3). Higher demand
As the world continues to develop, there is increasing demand for water in emerging parts of the world such as Africa and Asia.
Water Stocks
You can invest in individual water stocks. These companies are usually utilities that sell drinkable water to certain parts of the world. As an individual stock, these investments offer opportunities for outsized gains. However, they also carry the additional risks that come with investing in individual stocks.
American Water Works (AWK) - A public utility company that operates in the United States and Canada. Established in 1886, the company has revenue of $3.66 billion in 2021.
American States Water (AWR) - This is an American water and electric utility company founded in 1929. In 2021, the company had annual revenue of $136 million.
California Water Group Sources (CWT) - This is an American water utility company that serves the Western United States market. Founded in 1926, the company had annual revenue of $256 million in 2021.
Water ETFs
Water exchange-traded funds or ETFs give you the opportunities to invest in a basket of water stocks with one trade. Water ETFs are a great way to instantly own a diversified portfolio of water stocks.
Water Resource ETF (PHO) - This ETF is made up of top water stocks including American Water Works Co. (AWK), Roper Technologies Inc. (ROP), and Ecolab Inc. (ECL).
iShares U.S. Utilities ETF (IDU) - This ETF is made up of several utility stocks some of which include water utilities.
Global Water Portfolio ETF (PIO) - This ETF holds a basket of international water stocks.
Getting Started With investing in Water
If you have considered investing in water, now may be your opportunity. This little-known part of the commodity investing world may deliver outsized gains in the water. Be sure to check out the available water investing options available today.
REFERENCE:
https://www.investopedia.com/articles/06/water.asp
