Water, says Fortune Magazine, is the new gold. Like gold, oil and other natural resources, water is a precious commodity. But, unlike gold and other commodities, you can’t live without it.

Think about it, water is our necessary source of life. Without water, our society will be obsolete. Further, tainted and unsanitary water can seriously hurt or even kill us.

But, water could also be a source of income and opportunity. Portfolio diversification is important to investors and water might be the best, new and upcoming opportunity that all investors should start considering.

Not only will investing in water allow businesses and water infrastructure manufacturers to address sanitation and cleaning needs, but it could also result in major financial returns for investors.

Global Water Resources and The Water Crisis

About 70 per cent of the earth’s surface is covered in water, but most of that water (97 per cent) is saltwater which is unsafe for human consumption. Aside from saltwater being unsafe for drinking water, it also cannot be used for crop irrigation or other industrial uses.

What about desalination? That is still very wasteful and energy intensive. So long story short, of the remaining three percent of water available, only one percent is available for human consumption and usage.

The World Wildlife Fund estimates that by 2025, two-thirds of the world’s population could face water shortages.

This poses a huge issue and illustrates the scarcity and severity of lack of water access. We are in a global water crisis.

Because of this water scarcity, not only is there an investment opportunity but there’s also an opportunity to provide better access to clean and safe drinking water worldwide.

Investing In Water: How It Works and What You Need to Know

When considering an investment in water, it’s best to learn about the different options available and, further, how your investment is making a positive impact on the global water crisis.

How Is Water Managed and Who Owns Water?

A lot of water sanitation companies and manufacturers that support water utility services have embraced privatization. For example, in the United Kingdom, the water market is completely private while other countries still manage most of their water resources through government, public programs.

Another frequently used strategy for water management is Public-Private Partnerships (PPP). What that means is that there is an arrangement between a public sector service (water utilities, for example) and private companies.

This strategy allows for the private company to provide the capital upfront while the public sector delivers the service. Then, profits are collected over the long term from taxpayers and other users throughout the contract to pay off the private capital investment. PPPs essentially allow projects to be completed sooner.

Understanding the management structure of water is the important first step in the investment process. This allows investors to make the best decisions for their portfolios. Further, water utilities offer abundant dividends. Understanding the stock dividend policies from the outset will allow investors to calculate and evaluate whether the stock is overvalued or not.

Water Investment Options

There are options when deciding to invest in water. You can purchase shares from companies that produce equipment that support the water utility industry, such as pipes, filters, meters and more. Or you could invest in environmental service and water utility companies that are tasked with cleaning and purifying water.

Water Shares

Since investing in water is a newer concept, there are of course risks involved. The market offers a variety of water utility stocks. However, it’s best to evaluate these stocks thoroughly to ensure you are making a sound, long-term investment that will pay off.

It’s best to invest in companies that have a history of stability through different economic ups and downs.

Also, if you are considering investing in water stocks and companies that are geographically diverse, it’s necessary to monitor global exchange rates and factor those into your decisions.

Water ETFs

Water ETFs (Exchange Traded Funds*) are a great way to start investing in the water industry with a single fund. These work by holding shares from companies who work in the water industry. For example, these companies provide water purification services, pipeline services and construction, filter development, meter creation and installation, and other related equipment needed throughout the water process. This option offers a lot of benefits like diversification in the investment portfolio, passive management and typically low expenses.

A word of caution, however, is that leveraged ETFs can be complex financial instruments. Some of which come with significant risk. This option is recommended for experienced traders and investors.

The Benefits of Investing in Natural Resources

Investing in natural resources, like water, is not an old concept but it is an up-and-coming portfolio diversification strategy.

What’s great about investing in natural resources is there is always a demand or need for it. Along with it being a sound option for long-term return, it could also help the environment and economy.

Grow the Local Economy

Typically, natural resources are located in areas where there is little to no civilization or infrastructure and the communities that are located there, severely need economic intervention and assistance.

If you’re considering investing in companies that work in the water industry, consider looking into different parts of the world that need it. Not only are you providing clean water to areas where water is scarce, but you are also providing potential opportunities for jobs which would lead to economic growth in that area.

What’s more, is that you could be assisting in bringing jobs to that area. For example, if a water purification plant is needed to help purify and sanitize water so it is safe for consumption, this would create new jobs in that area, allowing for community and economic development.

Help Combat the World’s Water Crisis

By investing in water, not only will you notice a great financial return, but your efforts will also help in solving the world’s water crisis. Governments and private companies need help and rely on investors to help support their efforts.

What’s more, is that the infrastructure is crumbling–if there is any drinking water infrastructure at all leaving communities at risk of not having potable or safe water. Additionally, investments in water purification can help greatly reduce the risk of disease and virus transmission through water.

How to Get Started in Water PhilanthroInvesting

In recent years, we’ve seen an increase in demand for alternative investments and investors that are seeking to profit from the growing need for fresh, clean and safe water. This trend will continue and, as an investor, you will see fresh opportunities to diversify your portfolio.

These investments will expose you to this precious commodity and to companies that work to deliver this important resource to communities.

There are plenty of ways to add water to your portfolio, but one of the best options is to partner with a professional to guide you to the best option for your financial and portfolio goals.

At PhilanthroInvestors, we truly believe that “Water is the New Gold.” We understand that this new investment opportunity can be uncertain or overwhelming.

Once you diversify your portfolio with an investment in water, not only will you receive the financial return you were hoping for but you’ll also feel good about doing your part to help solve the world’s water crisis.

With water quickly becoming scarce for many, the demand for solutions continues to increase, opening the door to more financial profitability for investors.

If you’re ready to invest in the new gold, we are here to help. Learn more and talk to some of our Ambassadors to determine how you can get started and what the best solution will be for you.

* An exchange-traded fund is a type of investment fund and exchange-traded product, i.e., they are traded on stock exchanges.

About PhilanthroInvestors

PhilanthroInvestors combines traditional venture capital financing tools with philanthropic principles to achieve social impact. By secure, meaningful, and profitable investments, they bring capital and also change people’s lives.

PhilanthroInvestors are currently working in four sectors – Housing, Water, Health and Environment – and will be adding more investment sectors in the future. PhilanthroInvestors founder Ivan Anz owns companies on three continents and has investors in 14 countries.

Discover how investing with us can secure your future. Get in touch here.