I love building my own green portfolio with handpicked stocks, but for many investors venturing into this exciting market sector for the first time, it makes a lot of sense to establish an initial stake with index exchange traded funds (ETFs).

After starting the week with a broad-based sell-off, stock markets resumed their five-month uptrend as investors’ confidence in the recovery prospects of the global economy gained traction. With risky assets back in favor, a number of bourses and crude oil closed at fresh highs for the year, showing resilience in the face of a sharp correction in China on Monday (-5.8%) and Wednesday (-4.3%). Safe-haven assets such as government bonds and the US dollar received a cold shoulder.

By Lara Crigger

From biofuels to peak oil, from wind power to solar "picks and shovels," we've been talking quite a bit about alternative and renewable energy on Hard Assets Investor lately. That's why we decided to get the lowdown on the latest developments in clean energy from Alt Energy Stocks' Tom Konrad, Ph.D., CFA.

Yet cleantech is a risky play because despite all the investment in the field, most clean technologies are not profitable. Only wind energy can currently compete with fossil fuels without subsidies. But with carbon legislation now inevitable, technological advances bringing costs down, and market values depressed by the financial crisis, the future is looking brighter for cleantech shares.

Rubbish, trash, garbage, waste, whatever you call it, we all generate it, and it is taking over the world’s space and mother nature’s abundance faster than imaginable. If we continue to be a disposable society, there’s at least one ETF that could benefit.

Although waste is universal, the concept of it is ignored and poorly understood. Nobody really knows how much is produced or what happens to it once it’s created.

These cost curves strike me as fanciful -- does anyone know how closely they have hewn to reality since being created in 2002? -- but they are interesting and darn colorful:

The above table [click to enlarge] includes statistics and a short description of the 20 companies included in the ETF Innovators Global Carbon Trading Index along with benchmark energy commodities and exchange-traded products. The 20 companies in the Carbon Trading Index posted a gain of 5.6% over the past month, despite declines in the overall market, the global price of carbon, and major energy commodities.

The accompanying table(click to enlarge) includes 19 companies in the ETF Innovators (ETFI) Global Carbon Trading Index along with the prices of seven benchmark commodities and funds. The Carbon Trading Index rallied over the past month along with the overall market, although the gains were less than the overall market and the index has declined by more than 50% in the past six months.

President-elect Barack Obama plans for a grand entrance into the Oval Office with an economic recovery effort that will touch upon many different sectors and ETFs.

Obama has directed his economic team to create a two-year stimulus plan that he hopes to sign into law soon after taking office on Jan. 20, reports Jackie Calmes and Jeff Zeleny for The New York Times.

Eastern European Risk

Emerging economies and ETFs were among those the hardest hit last Friday as the financial turmoil seemed to touch down on every corner of the globe.

Back in colonial times, the trash haulers were viewed as vile, disgusting human beings. By default they were charter members of the lowest class of society.

Not anymore. High up on the list of wealthy people in any given area is the local landfill owner.

By Jim Wiandt

Want to know who's winning right now? Here are five ETFs that are holding up well against the bear.

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Living in a small town in Western Pennsylvania, I am within 20 miles of several active windfarms, a Gamesa (GCTAF.PK) wind turbine manufacturing plant, a resurgent coal mining industry, Waste Management (WMI) landfill gas capture projects, and natural gas exploration as part of the Marcellus Shale deposit.

One Man’s Trash Is Another Man’s ETF Treasure

Crowded landfills, global warming and skyrocketing commodities prices have led to a growing interest in waste management that could benefit related ETFs.

Waste management includes trash collection, separation, disposal and recycling, the latter of which has already gained more momentum as rising prices in raw materials has made the recycling much more profitable. Stricter disposal and recycling regulations caused by limited landfill space, especially in Europe, have increased the cost of waste management, reports Thao Hua for Investment News.

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The table above presents an updated version of my Global Carbon Trading Index, which now includes 18 components with a one month return of -6%.

For those of you that have been reading the Smug Investments blog, Smugly Green, you will be familiar with our green portfolios. If you’re reading Seeking Alpha, check out these links as they lay down the foundations to our thinking: Beginner’s Guide to Green Investing, Green Commodities for a Complete Green Portfolio, and Green Investing and Risk Management. True to form, I wanted to go over some simple quantitative ways to reduce overall volatility in your green portfolio. It will also illustrate the point that, if you expanding your notion of green as mentioned in the Green Commodities article, there’s no reason a bigger piece of your overall investments, if not the whole thing (as is my case), can’t be green, responsible, and sustainable.

For those of you that have been reading the Smug Investments blog, Smugly Green, you will be familiar with our total green portfolio concept. For non readers, the ever expanding universe of green, light green, and responsible ETFs are making it possible to start thinking out of the box when creating your green portfolio. In order to do it right and be properly diversified, the notion of green may have to be stretched, but it's well worth the effort to create a more fully sustainable investment portfolio that doesn't necessarily sacrifice performance.

The obvious start to any green portfolio is the green energy options, some of which I laid out in my Beginner's Guide to Green Investing on Seeking Alpha. However, green energy is just a piece of the overall puzzle, albeit it an important one. The best way to start expanding the notion of a total green portfolio is to redefine asset allocation categories - instead of Small Cap, Mid Cap, Large Cap, and Bonds, Smug Investments' allocation classes look like this:

Sushi rice, sticky rice, rice wine vinegar, saki and ethanol. Ethanol? Yes, ethanol - the Japanese are experimenting with rice as fuel. A recent article in the Wall Street Journal explored the subject. But as is always the case, there's more to the story than the quick hit.

With all of the recent news about food shortages and rising food prices worldwide, the idea of growing rice for ethanol would seem ludicrous on the surface. Rice is even more of a main staple than corn for most of the world's population - much more - and just look at the political blame being laid on the threshold of corn ethanol. But in Japan, it's possible, just possible that it makes sense.