Alternative Energy
Obama has said he would like to spend $150 billion over the next 10 years developing alternative energy. "It's pretty clear that he wants this to be his legacy," says Robert Froelich, who is the chief investment strategist of Deutsche Bank's asset-management division. All that R&D money should help companies that are developing such things as hydrogen fuel cells and the technology to harness the power of ocean waves. Problem is, that stuff is a long way off before it can be widely used, and most of the companies developing the technologies are small and hard to invest in. What's more, it's not clear which alternative will become the alternative. So your best investment tactic here, professional investors say, is to buy shares in a company that will benefit from an increase in demand for the only biofuel that is already widely available — ethanol.
Pick: Archer Daniels Midland (ticker: ADM) is the world's largest producer of corn, which is one of the main sources of ethanol. Many states already require gasmakers to include ethanol in the blend you get at the pump. Obama would like to increase the percentage of ethanol that is used in the production of gasoline. That means we would need to produce more ethanol, driving up the demand for corn. ADM's shares recently traded for $22. Of course, a bad economy could hold down demand for gas and ethanol for now. But an analyst at Soleil Securities recently began recommending ADM, saying the shares could reach $25 in the next year.