Trend: Clean, drinkable water will be in demand and scarce as populations increase and supplies get contaminated and/or depleted.
Jon Markman at MSN Money describes why water is a good long-term investment. Excerpts below.
A brand-new exchange-traded fund designed to track the performance of water stocks, the PowerShares Water Resource Portfolio (PHO) -- which tracks the PowerShares Palisades Water Resource Index ($ZWI.X) -- is up a whopping 15% so far in 2006.
In January of last year, I explained in a column (“Invest in the coming global water shortage” ) that a key attraction of water as an investment is that demand is accelerating and is not affected by inflation, recession, interest rates or changing tastes. You can live without steel. You can live without oil. You can live without gold. But try living without water, and you won’t last too long.
The problem is not that the world is running out of water.... No, the problem is that drinkable surface water is increasingly polluted due to the urbanization of rural areas and industrial farming, particularly in the developing world and China. And all the while, there are simply a lot more people who want a sip.
The United Nations, which will celebrate World Water Day on March 22, reports that the consumption of water worldwide is doubling every two decades -- twice the rate of world population growth.
If you think world conflict over oil has been bad, wait until you see major fights over water rights.
The best way to play water is probably through the companies that supply pollution-control, purification, pipeline construction and irrigation-control products, though there’s nothing wrong with owning a couple of successful water utilities as well.