Alternative energy stock portfolios are a smart addition to an investor's portfolio. There is a lot of growth potential in these investments, making them a great choice for long term investments. The money you put into these stocks will further the goal of putting alternative energy sources into use.

By 2013, it is forecast that alternative energy will be a $13 billion industry. This shows us that there is a lot of long term potential in this sector. If you were to invest in an alternative energy start up, you could in a few years time find yourself owning shares in the alternative energy equivalent of Microsoft! People are tiring if the high price of gasoline; this isn't enough information by itself, but does show that there is real potential for investors in the alternative energy industry.

This does not mean that you don't need to do your homework about any alternative energy stocks you may be considering. A financial planner's advice could be valuable here. There are some alternative energy companies which seem to be very solid, but you shouldn't go out and snap up every stock in this sector. First Albany Capital analyst Sanjay Shrestha tells us that investors should exercise caution in chasing these stocks. As an investor, you are probably aware that most of the companies in the alternative energy sector are startups or very young companies.

This means that at this stage there will be little or no earnings in the short term or a history of earnings to look into. This could mean that a bubble is in the offing, such as was seen a few years back with the dot com industry. Bubbles are bad news for investors.

Juliet Davenport, Chief Executive of the UK alternative energy supplier Good Energy tells us that the outlook for the alternative energy industry looks bright. However, this is an industry which is at a crucial juncture; these companies need the continued support of governments, of customers and especially of investors to ensure their growth and the growth of alternative energy sources as a whole.