Stock markets have long moved to their own drummer, responding to forces that are sometimes quite different than what we expect. For investors, the key to success is to figure out just what force – or combination of forces – is going to impact the markets next.
In a recent report from the UK-based Chatham House think tank, economy and finance program director Creon Butler points to climate change as the next market game-changer. In fact, Butler sees climate issues causing a sharp market correction within 5 years.
Butler points out some of the potential fallout risks of a rapidly warming climate, and their influence on markets. His list of risks includes the emergence of new diseases, alterations in crop cycles reducing food supplies, tighter government regulation on carbon emissions, and a real estate pull-back from coastal areas. That last point, on property, is already impacting California, where several major home insurers have stopped writing property policies due to an increased risk from natural disasters.
“Whatever the reasons for the markets’ current equanimity on climate risks, a sharp adjustment looks increasingly probable. The longer it is delayed, the sharper it is likely to be – and the more potential triggers emerge,” Butler summed up.
But it’s not all doom and gloom – some stocks will thrive in this new climate-change era. We’ve used the TipRanks database to pinpoint two names that will play a crucial role in shaping the emerging ‘green’ economy. Let’s check the details.
Brookfield Renewable Partners (BEP)
First up, Brookfield Renewable, an owner and operator of renewable power assets. The company owns a diverse portfolio of energy assets around the world, including distributed energy and sustainable solutions as well as wind, solar, and hydroelectric power generation facilities.
Brookfield is under 60% ownership of Brookfield Asset Management, one of Canada’s largest alternative investment management firms. This gives the partnership energy firm solid financial backing, which it has used to build up its capabilities in…
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