Infrastructure is the basic framework needed for a community to function: communication systems, public transportation, water towers, power lines, schools... the list goes on and on.

Quite often, we take these necessities for granted until a storm knocks out the electricity or water suddenly stops running from the tap. Such disruptions are more than just minor inconveniences -- they can put our entire lives on hold. And for government agencies tasked with the operation of vital assets such as public transit lines or hydroelectric dams, the stakes can be even higher.

For example, the collapse of a major bridge in Minneapolis in 2007 wasn't just an unfortunate tragedy that took 13 lives; it also opened quite a few eyes to a more serious problem on our roadways. Most bridges are constructed with a lifespan of about 50 years, and the average bridge has currently been in use for 43 years. As you might expect, that has left many bridges in a dangerous state of disrepair.

In 2008, for example, a six-foot fissure was found in a support pillar beneath I-95 in Philadelphia, forcing the detour of 185,000 vehicles per day as repairs were made. Nationwide, the Federal Highway Administration believes approximately 152,000 of the nation's 600,000 bridges (1 in 4) either require substantial work or have become obsolete and must be replaced entirely.

The overall price tag to bring all these bridges up to date: about $140 billion.

Of course, this is just a drop in the proverbial bucket. Every four years, the American Society of Civil Engineers (ASCE) issues a report card grading the U.S. on 15 key infrastructure categories. The latest round of scores shows critical shortfalls that must be addressed in virtually every area.

Trillions in Outlays

We already know about the nation's deteriorating bridges, which you might think would receive failing marks from the ASCE. But in 2005 they received a 'C,' the second-highest grade given in the report -- which gives us a pretty good idea of how much work must be done in other areas.

For example, the number of unsafe dams has climbed to 3,500 -- many of which could lead to catastrophic damage should they fail. The ASCE estimates it will cost somewhere in the neighborhood of $10 billion to correct the problem.

Getting safe drinking water to homes and businesses is even more problematic. Every single day we lose about 6 billion gallons of water to leaky or corroded pipes, and current funding is just one-tenth of the amount needed. The Environmental Protection Agency is predicting that more than $275 billion is needed for water distribution and treatment over the next decade.

And while energy needs have climbed steadily, maintenance on the nation's transmission lines has actually decreased about -1% annually. These outdated facilities simply weren't designed to handle current demand, and the risk of future blackouts is very real.

As for inland waterways, we have about 260 locks used by cargo barges to navigate through 12,000 miles of rivers, and about 50% of those are deemed 'functionally obsolete.' This will require another $125 billion to fix. Wastewater treatment facilities are also impaired, discharging billions of gallons of untreated sewage each year. That's another $390 billion worth of upgrades and repairs.

Freight and passenger railways, hazardous waste removal, public parks, highways, landfills... the story is the same. Overall, the ASCE has given America's infrastructure a 'Poor' grade of 'D' and put the repair bill at a staggering $1.6 trillion.

If the story ended there, we would already have a compelling investment thesis. But it's just the beginning: An even bigger picture is unfolding overseas. After all, we are only addressing problems that have been left unchecked. But in many emerging markets, the necessary infrastructure hasn't even been built yet -- so outlays for basic things like water and electricity will dwarf what is being spent here in the U.S. In fact, Morgan Stanley is forecasting $22 trillion in emerging market infrastructure spending through 2018. That spells plenty of opportunity for well-placed companies both foreign and domestic.

Opportunity Indeed

There are two primary ways to play the infrastructure sector. Investors can look to direct investments in the vast array of companies involved in infrastructure, such as construction companies, civil engineering firms, treatment facilities, water technology developers, communications networks, and raw materials providers, or they can dive into a huge variety of ETFs and mutual funds. These funds are ideal for those who want broad, diversified exposure to the entire infrastructure category or those who want to focus on various subsectors such as water, emerging-market infrastructure, steel, or nuclear energy. What's more, the long-term nature of infrastructure's fixed assets can certainly provide stability to a portfolio, a global exposure, and a chance to catch the 'green wave' that itself is a big opportunity.

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Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

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