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Should You Ride the Electric Car Trend?

By U.S. News & World Report

Is the buzz over electric vehicles worthwhile for investors looking to get in on the ground floor of the emerging technology?

As with all industries in their infancy, there are risks and rewards.

The world is on deathwatch for gasoline vehicles. Increasingly, governments are approving regulations that would faze out the use of gasoline-powered vehicles. Norway wants to stop the sale of fossil-fueled vehicles by 2025. France and India want to nix gasoline engines in new cars by 2040 and 2030, respectively according to Global X Funds. It’s likely that governments around the world will jump on the bandwagon.

[See: The 10 Best Ways to Buy Tech Stocks.]

That’s all well and good, but who profits from the change in the industry?

“It is about digging into each company and finding out how they will benefit from the changes in materials use,” says Chris Terry, a metals & mining research analyst at Deutsche Bank Securities in New York.

Not all companies in the automotive sector are set to profit equally. For instance, a manufacturer of windshield wipers probably won’t see any difference, because electric vehicles need no more or fewer wipers than other cars. Likewise, tire makers and manufacturers of headlamps and seats might not see a boost to demand.

Even car manufacturers aren’t a certain bet. Companies that make gasoline and diesel vehicles can make electric ones instead.

“For electric vehicles, the underlying technologies are not uniquely proprietary,” says Ken Fisher, executive chairman and co-chief investment officer at Fisher Investments.

But what if there was an area where new competitors might be delayed or slowed down?

Fortunately, there is such a group, those companies that produce the key raw material that is used to make electric batteries.

Game-changing technology. Growing demand is on the way for one key raw material in particular. The game-changing technology for electric vehicles has been the lithium-ion battery, and it is there that there are some big bucks to be made. Global X claims that some electric vehicles use in excess of 10,000 times more lithium than a smartphone — meaning that 1 million electric cars would use the same amount of lithium as every smartphone ever sold.

There are about 17 million cars and light trucks sold or leased annually in the U.S., so the opportunity for investors of lithium-ion batteries is enormous.

[Read: How to Invest in the Car of the Future.]

Better still, there are reasons to believe that the portion of electric vehicles will steadily grow.

“We are looking at getting close to 30 percent of new vehicles by 2030 in the U.S.,” says Luke Tonachel, director of clean vehicles and fuels at the Natural Resources Defense Council in New York.

If U.S. demand for cars and light trucks doesn’t change by 2030 that equates to approximately 5 million new electric vehicles. That’s a lot of cars and a lot of lithium to be produced by mining companies.

It is in such enterprises that there are major potential profits to be made.

How to invest. Setting up a new mine of any sort can take years. A mineral deposit must be located, feasibility studies must be completed, and finally, capital raised, all before production can start.

This long timeline is no less true for lithium producers. As demand for lithium increases in line with battery demand, the supply will take a while to catch up. During that catch-up period, prices for the metal will rise. Eventually, of course, higher prices will prompt more supply as mines get developed and once again moderate the cost of the metal.

But for the time being at least, the miners who already produce the metal should do well.

With that in mind, take a look at resource firms FMC Corp. (NYSE: FMC), Chile’s Sociedad Quimica y Minera de Chile ( SQM), and Albemarle Corp. ( ALB) all of which are in the lithium business.

Investors wanting a broad way to play the trend might consider the Global X Lithium & Battery Tech exchange-traded fund ( LIT), which tracks a basket of stocks involved in the industry. It has annual expenses of 0.76 percent or $76 per $10,000 invested.

[See: 10 Great Tech ETFs That Stay Under the Radar.]

The fund is heavily concentrated, with 77.9 percent of the value in the top 10 holdings, and with one stock alone, chemicals and lithium company FMC Corp., accounting for 23.3 percent, on the same date. Three-fifths of the securities held are from the basic materials business.

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Should You Ride the Electric Car Trend? originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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