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It's Not Easy Investing Green

With capital tight, experts warn to proceed with caution on your earth friendly investment strategy.

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This story appears in the August 2009 issue of Entrepreneur. Subscribe »

With billions of dollars being thrown at clean by private investors, and the federal stimulus package injecting $8 billion in loans for projects, green investing opportunities suddenly seem like low-hanging fruit just waiting to be picked.

Everywhere you look, there are windmills turning and solar panels being installed on homes and businesses. Then there's the $11 billion earmarked for building a "smart grid," a nationwide network of high-voltage transmission lines that promises to do for clean energy what interstate highways did for cars in the 1950s.

So why are many experts cautioning investors to slow down on the clean-tech superhighway?

Not feeling green? Give in to sin

Some sectors will probably always be more recession-resistant than others. (Believe it.) And since humans will never stop being, well, humans, regardless of the economy, so-called vice investments often boom the more people seek comfort in their bad habits. The most common "sin stocks" fall into the categories of alcohol, tobacco, gaming, defense and-ahem-adult entertainment. So if green's not your thing-or if you're just looking to truly diversify your portfolio-pick up a good book (we recommend Investing in Vice: The Recession-Proof Portfolio of Booze, Bets, Bombs and Butts, by Dan Ahrens) and go to vicefund.com to do some research. -Jenna Ulicki
"I think there are opportunities for investors in the ," says Glenn Croston, author of

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