The most effective way to invest in water for most people is by buying shares of the water ETF, PHO.
PHO is a collection of water oriented stocks. It seeks to follow the value of the Cascades Water Index. Within the ETF are companies that process water, water utilities, sell water, and water parks. Well no water parks, but just about every other company of quality that deals with water primarily.
Short term trading with PHO is not advised. Short term trading is not advised by me generally, but especially with PHO. Water is a long term bet. Any investment in PHO should also be thought of as such.
Another interesting way to invest in water potentially is to get a piece of companies that service water utilities. The logic being that America’s water delivery system is starting to fall apart. Most water systems in the USA are now pushing 100 years old. Water is the least visible of the utilities and so is the most neglected. America is in dire need of pipes, pumps, etc. If Obama implements a New New Deal these companies will likely reap a windfall.
Invest in making water fresh. Desalinization could be huge. As the population in the desert areas of the world continue to grow this is an area that could see huge growth.