What You Need to Know About Investing in Nuclear Energy

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What You Need to Know About Investing in Nuclear Energy

To combat the rising prices of gas and the damage that fossil fuels are having on our environment, the shift towards renewable energy sources is becoming more and more apparent each year.

The willingness to invest in nuclear energy during this time has become a valuable option, along with other investments such as solar power and wind energy.

However, in today’s blog, we want to not only assess if nuclear power is a viable energy provider with the goal of net zero by 2050 but also look at whether it can be a good investment for your portfolio from a profit standpoint.

 

What is Nuclear Energy?

In simple terms, nuclear energy is the power generated by nuclear reactions such as the nucleus or core of an atom to produce electricity. This is typically the process created and controlled by a large industrial nuclear power station, where the heat energy is transferred into electrical energy in order to become a power source.

According to Statista’s study on nuclear energy, in May of this year (2024), there are 440 nuclear reactors in operation across 32 countries, with the United States being the country with the largest number of them at 94. This essentially means that the capacity of electricity generation is getting larger and larger, which is great for renewable energy sources.

Nuclear power is an eco-friendly power source and, as we said, is part of the renewable energy sources on a global scale. It has the main goal of protecting our world’s air quality by producing massive amounts of carbon-free electricity.

 

Advantages and Disadvantages of Investing in Nuclear Energy

As an investment, however, there can be many benefits and drawbacks to adding nuclear energy to your investment portfolio. Let’s take a look at both sides here:

 

Advantages

  • According to the World Nuclear Association, it now accounts for 10% of our global electricity
  • You’re contributing towards the global energy goal of net zero emissions by 2050
  • You’re contributing towards a greener future for our planet
  • It runs on uranium, which our world has in abundance
  • The largest economies worldwide are looking to boost their investments in this industry
  • There are funds you can invest in so you can diversify your investments

 

Disadvantages

  • If you invest in a single nuclear fuel company, its performance will be extremely volatile
  • Even investing in one sector can be risky if the nuclear industry goes downhill
  • There could be geographic limitations
  • There may be changes in regulations that could massively affect the sector
  • The technology could take a hit if it’s not scalable or reliable
  • Even if you invest in a fund, you’re not diversified (all your money is in one sector)
  • After the 2011 nuclear disaster at Japan’s Fukushima Daiichi plant, certain countries are shutting down all nuclear power plants (Germany at the forefront)

 

Examples of Investment Options You Have With Nuclear Energy

With nuclear energy, there are a few ways you can begin adding these types of stocks to your portfolio. This table will give you the main ways you can invest in nuclear energy in today’s market:

Types of Nuclear Investment Stocks Their Purpose
Nuclear Funds or ETFs Funds and ETFs allow you to invest in lots of different companies within the nuclear sector (rather than one company)
Nuclear-Related Stocks Buying individual shares in companies that are related to nuclear energy in some way (have a link to its operations)
Pure-Play Nuclear Stocks Investing in a company that is completely focused on purchasing nuclear energy stocks

As you can see, there are a few ways you can begin investing in nuclear energy. By either investing in companies and shares yourself, investing in companies that buy nuclear energy stocks, or investing in broad funds or ETFs that follow an index of the nuclear sector.

 

Should You Invest in Nuclear Energy?

Whether you should invest in nuclear energy or not depends on many factors, such as your values and risk tolerance, for example. If you’re investing in nuclear energy for the benefits it’s going to bring to our society by giving us net zero emissions by 2050, and you’re genuinely environmentally conscious, then it could be a great investment for you.

However, if you’re going to invest in this sector or a company within the sector for purely profit reasons, the volatility of your investment is very high, which is not what you want if you’re following a long-term investment strategy to set yourself up for future success.

Whether this sector or a company you invest in flourishes is not down to you, and no one knows if it’s going to succeed or not, which makes the investment a risky one. However, if you’re conscious of that, but just want to put some money towards ethical investing, then this could be a great thing for our society.

 

How to Invest in Nuclear Energy

Although you now know the types of investments you can go into and whether or not you want to invest in this sector, here is a guide on how you can invest in certain companies, funds, or ETFs, if you’re one of the readers who wants to put some money into these operations:

  1. Open an account with a brokerage (investment platform)
  2. Or contact a local nuclear project you’re looking at
  3. Decide if you want to invest in a company, fund/ETF, or local project
  4. Do your research on the company, stocks, or funds you’re investing in
  5. Deal your shares using the investment platform with money you’re happy investing
  6. Or contact the company you’re looking to invest in with how much you want to put in
  7. You’re now invested in the nuclear sector in one way or another!

 

Now you’re invested in either a stock, project, or fund and can either watch how it performs, or keep putting investments into it and watch the performance.

Important Note: We are not telling you to invest in this sector nor are we telling you not to. This is purely an informational blog guiding you through the benefits, drawbacks, and how to invest in the stocks if you decide that they align with your values.

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