I would consider making a modest allocation to this sector because of its smaller capitalization stocks and concentrated positions which can enhance volatility. This is definitely more of an aggressive industry group because of its technological nature and competition from traditional energy behemoths.
Volatility can be both a blessing and a curse depending on your risk tolerance and ability to withstand price declines. That is why trading location and risk management will be key to successfully adding new money.
I think that the future prospects of the solar energy industry are shining bright and that continued innovation will lead to further adoption in homes, businesses, cars and other industries. However, as with any investment, it's important to keep a level head and not get swept up in the euphoria of past performance. Purchasing these stocks or ETFs on a modest pullback will enhance your odds of success over the next 12 months.
At the time of publication the author had no position in any of the stocks mentioned.Follow @fabiancapital This article was written by an independent contributor, separate from TheStreet's regular news coverage.
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