Coal Investments: Invest in Thermal Energy Coal through ETF: Options, Futures, Derivatives & Commodity Trading

Coal Investments: Invest in Thermal Energy Coal through ETF

This article contains details about Investments in Coal based Exchange traded funds - the advantages, disadvantages, risks and analysis of Coal ETF's Coal ETF
With the Japan disaster taking a high toll by exposing the dangers of nuclear fuel based energy, the world is now looking for better and alternative sources of energy. This provides a great opportunity for technology development not only for alternate sources of energy, but also for traditional fossil based fuels sources like Oil and Coal. Traders and investors can capitalize upon these ever growing demands in the energy sector, as the energy needs of the world are growing leaps and bounds day by day. However, what is more important from an investment or trading purpose in the enerrgy sector is to analyse and assess the right area of investments in energy. In this article, we will focus on thermal energy based Coal ETF or Coal based Exchange Traded Funds

Coal Investments thorugh Coal ETF

What are the benefits and advantages of investing in Coal ETF Exchange Traded Funds
Energy needs are ever growing. Nuclear energy was looked upon as one of the efficient alternatives for fossil based energy sources like oil and coal, but the recent calamities in Japan have exposed the dangers of nuclear energy.
Now, at this time, it is estimated that Japan will rebuilt again, and this time it will reduce its dependence on nuclear energy and compensate for the same by going for traditional thermal & fossil based sources of energy like oil and coal. It is also estimated that Japan currently is the largest importer of coal, and during the rebuilding process, its imports i.e. the demand for Coal, will only increase further.
Not just Japan, even other countries after witnessing the massive problems in Japan, will be switching their focus from Nuclear energy to Coal based energy, and hence the demand as well as investments in coal will increase substantially. High demand of coal will mean better business opportunities for coal based companies and that is expected to translate as good returns for Coal based ETF's.

What are the disadvantages & risks of investing in Coal ETF Exchange Traded Funds
Nothing in this world comes without risks or disadvantages.
Coal is a fossil fuel, which has a danger of becoming completely extinct one day. So what it means is that people are always looking for alternative sources of energy. And that's where the problem comes in. Take the example of nuclear energy development - few decades back (even till last few months), nuclear energy was being looked as a great and efficient source of energy. It posed a danger to the traditional coal and oil as sources of energy.
Then you also have other alternative forms of energy - the wind, solar, biomass, etc. All these sources keep competiting against each and at various times some are considered to be better than others. It's just a matter of time.
One more risk to take into consideration is the forex risk. Since most coal based ETF's invests in coal companies on global basis, it will incur forex risks.
Now that you know the benefits and risks involved in Coal based ETF's, check the List of Coal ETF
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