Tuesday, January 13, 2015

Investing in Oil

With oil (WTI) at $44 the barrel investors have been trying to call the bottom.  Coming down from a high price in the $100's oil can still go down further and stay there for awhile but if you are young or just have the patience to wait it out you should consider starting to buy some shares in the energy sector.  These oil companies' stock price have dropped: Halliburton (HAL), BP PLC (BP) and Chevron Corporation (CVX) therefore investors at the end of 2014 started to buy them. Obviously they failed to get the shares at the bottom yet it doesn't mean it's a totally bad play no one can call a perfect bottom or top your goal is to try to get close enough.  With that said these companies should be on your radar if you are trying to invest long term or want to add a piece of the energy sector to your portfolio.  If you want a little more diversification (GE) has about a 15-20 percent exposure to oil this lets you be in the game but not as aggressive.  Another thing to consider is that these companies all pay dividends so you will be paid as you wait.  Lastly some experts believe that the days of $100 oil is gone and that some oil companies are in more trouble than they realize.  I still went ahead and decided to put some oil exposure into my portfolio.

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