Why Invest in GreenAngel Energy?

As either a retail or institutional investor, investment in GreenAngel Energy (TSX.V: GAE) can provide investors with attractive benefits that reach beyond a financial return. In a recent blog post on ethical investing we highlighted some of the pros and cons of investing in “ethical” or “socially responsible” investments like GAE. If you have not already had a chance to read it we recommend you have a quick read to help you better understand the non-financial pros and cons of investing in a fund like GAE. Below we will discuss further the financial implications of investing in a fund like GAE and bring to your attention some unique considerations to address when deciding whether investment in GAE is right for you and your investment needs at this time. Click to read Ethical Investment Article

First, although GAE is sold on the TSX and is a semi-liquid asset, it is not designed for day trading. More accurately it’s a buy and hold kind of stock. Like traditional angel investment, returns tend to be slow at first and it is no different for this stock. In order to get the best result from your investment in GAE you should hold your investment for longer than other, none venture-level stocks.

As for dividends, the GAE fund currently does not provide dividends to its investors and does not plan to in the future. If a fixed income security is what you are looking to invest in then than GAE stock might not be the investment for you right now. GAE prefers to take any cash flows received from exiting a company and re-invest those funds into a new early stage company. As the number of investee companies in the GAE portfolio increases, it reasons statistically that so do the chances of one or many of those companies succeeding and providing an exponential return to the investors.

So you might ask where the value creation comes from? The benefit from holding GAE stock over time is that as the value of the companies that GAE invests in increase, the stock price tends to have a correlated response. As the GAE investments gain value there should be an increased demand for the stock. Therefore GAE creates value for its investors when the investor eventually sells the stock and the value has gone up over the time the investor held the stock. Again, however, this value creation does not happen overnight, and the risk that an investee company could fail is possible.

If angel investment is what you are looking for, but you don’t have enough capital to invest directly into an emerging company and/or you are not an accredited investor, then buying GAE stock can provide this for you. Furthermore you get investment in not just one company, but six, with more on the horizon. Investing in GAE helps diversify the risk you are taking by spreading your capital investment among more companies.

Let us not forget about the upside. Investing in a company at an early stage and sticking it out until maturity can have huge rewards. Rewards that get passed onto GAE shareholders. GreenAngel Energy’s investee companies are developing the hottest green technologies, a booming industry with proven demand. With countries like China looking to the world for solutions to their population and energy problems, companies that can provide these solutions will inevitably see huge demand for their technology which in turn should increase the value of GreenAngel Energy’s portfolio.

As mentioned in the ethical investing blog we posted, if you are interested in adding GAE to your investment portfolio we recommend you speak with your investment broker or advisor to ensure it is in line with your investment goals. If you want to learn about GAE, please do not hesitate to contact Mike Volker, Bob de Wit or Ryan Schmidt at info@greenangelenergy.ca for more information.