Renewable Energy Stocks have been the hype of the decade and it is also true for the Stock Market in India where Renewable Energy Stocks are running like crazy and giving out some sweet returns to their investors. Plus it wouldn't be wrong to say that Investing in Renewable Energy Stocks in India is a promising venture as India is really focused on clean energy and sustainability for the future and the Government of India is offering various subsidies and schemes to make this a lucrative sector for the Companies.
But before investing in any stocks you should always get your checklist out and see if the fundamentals of the company you are investing in are Sound. For example, I like to look at a few key points like Debt Equity Ratio, Long Term Vision, Order Book, Cash Flows, and more.
As for Investing in Renewable Energy Stocks, you can go three ways among which the first is to buy Stocks, the Second is to Buy Mutual Funds with Renewable Energy as their focus, or the third way is to Invest in ETFs that dabble in Renewable Energy. All of the above methods can make your Investment easier for yourself, but that doesn't mean you should Invest in these.
As for myself I am staying away from anything related to Renewable Energy and it is not because I don't believe in the future of Renewable Energy but it is due to the fact that I am not knowledgeable enough to make financial decisions on whether Renewable Energy Stocks will perform well or not and because of this when push comes to shove I will fold and sell my Stocks at a loss.
So I have come up with a simple principle for myself when I am Investing in Stocks Directly and it is to
Invest in Things That I Know
This means I will only be Investing in Stocks that I know from top to bottom, for example, I know how the FMCG sector works but I have no clue how the pharmaceutical sector works so I will stay away from Pharma even if a Stock looks very promising.