How to Make Money with the Coming Water Scarcity?

TV pictures have shown early this year that around 4.4 million people in China are affected by the country's worst drought in decades. Farmland between Beijing and the Yangtze River has had very little rain or snow since November 2008. China is not the only country that is affected. The Western part of the United States experiences a water crisis. Los Angeles had its driest year between 2006 and 2007. Australia suffers its worst drought in history during the recent decade. Bush fires kill people and destroy towns. As if it is not enough: The news report about droughts in Argentine and Spain. Large cities in India suffer serious water scarcity.

What is going on? Scientists forecast more climate changes that are caused by global warming. Some areas get flooded with a surplus of rainfall, others suffer droughts. An additional problem is the growing world population, the exploitation and degradation of arable land, the deforestation of big wooden areas.

Droughts and water scarcity have a serious impact to several important industries. There is no agriculture and cattle breeding without water. Water is needed by industrial processing, e.g. in the pharmaceutical and chemical industry, food processing, production of fabrics, mining of metals. Water scarcity affects the hydro power plants and thus electricity production. Water is an inevitable commodity. If the trend goes on, water will be a much more valuable commodity than gold and oil. Some call it already the blue gold.

If there is a problem, there are also chances in offering solutions:

Make money with following water related stocks

Investments in water suppliers are usually risk-less, because water suppliers have a steady income stream during good as well as bad times. Furthermore they might benefit from President Obamas stimulus package. One of the targets of the US stimulus program is to renew and extend the water infrastructure in the US.

Some of the big players in this field operate globally and they might benefit from other economic recovery programs, e.g. in China. Some well-known water stocks are American Water Works, Veolia Environment, Aqua America, Consolidated Water. Exchange Traded Funds, ETF’s, are an alternative to single stock investments, e.g. Claymore S&P Global Water. They allow a sound diversification of the investment in a basket of water stocks.

The production of organic food has a benevolent impact to the water problem. Organic food production needs less water than the conventional agriculture. Plant Health Care that is registered at London Stock Exchange produces devices that support successfully organic gardening and agriculture. Plants can take up even water on arid and degraded land thanks to the natural root treatment by the Plant Health Care products.

Whole Foods Market is a leading retailer of natural and organic products. The world will need to turn towards organic products as the environment situation gets worse.

An interesting blue chip is Nestlé. They buy mineral water sources throughout the world. They have reached a high market share in the field of source water and mineral water beverages. Some famous water brands of Nestlé are Perrier, San Pellegrino, Vittel.

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