Most investors view sector-specific investments as risky. However, with oil prices soaring, you may want to explore energy investments to balance your self-directed IRA. The renewable energy sector has immense development potential. Recent government policies aimed at promoting renewable energy offer profitable investment options in the sector. Until recently, energy investments were virtually unknown to the investor seeking to protect their retirement portfolio. Even the passive investor is realizing the volatile consequences of a series of disappointing economic events in recent years. Investors should have a complete understanding of the benefits of investing in energy assets through their self-directed IRAs. While a self-directed IRA gives you the freedom to select, invest and manage your portfolio, choosing a combination of direct and indirect energy investments makes your IRA portfolio powerful and balanced. Such a portfolio benefits from reduced taxes and asset protection. For example, you can take advantage of tax benefits provided by the government if you invest in renewable energy through your self-directed IRA. Energy investments include investments in oil, natural gas, coal and renewable energy sources such as solar, wind or biomass, etc. Investing in energy can happen both indirectly and directly. Energy investments through stocks and mutual funds are the indirect route, while investments through limited partnerships or lease agreements take the direct route. How to invest in energy? In the current economic environment where oil prices are reaching higher levels every day, investment options range from choosing the right oil stocks to investing in long-term limited partnerships. Energy stocks that are… the focus of the paper… harness wind energy by using windmills or wind turbines to create electricity. With an annual growth rate of more than 30% in recent decades, especially in Europe, wind energy is the fastest growing renewable energy, after only the biomass energy sector. Companies such as Vestas Wind Systems have increased the capacity of their wind turbines in line with the huge influx of capital supporting the wind sector. Companies are adapting to energy-efficient business practices. As businesses continue to demand more and more renewable energy, the opportunities for green industries have grown tremendously. Google's $400 million investment in green energy has had a positive impact on its stock price. Similarly, GE Capital, ConocoPhillips and NRG Energy stocks saw positive increases in their share prices after announcing plans to form a joint venture to invest $300 million in new energy development..