How to Profit With Oil..
For
investors, the recent sudden fall in oil prices has created a huge
buying opportunity.
There's
multiple ways to play a rebound. First, there are ETFs.
The United
States Oil Fund (NYSE: USO) and
the ProShares
Ultra DJ-UBS Crude Oil ETF (NYSE: UCO)
are
two.
The former
generally corresponds to any movement in the price of oil.
But the latter is leveraged to provide
twice the return of any oil price rise.
That
makes it a more dynamic play going forward.
Currently trading around $8 per
share, the fund was trading at $40 when oil peaked last year.
If and when
oil returns to $100 per barrel, this ETF will deliver a generous
return.
Oil companies are another way to go.
However,
I'd avoid small-scale shale producers whose very existence is being
jeopardized by low prices.
Instead,
I'd focus on a major like Exxon
Mobil (NYSE: XOM).
Exxon
— with its size, quality assets, diversification, and strong
management — is better equipped than most to withstand a prolonged
downturn in
oil prices.
It might even take the
opportunity to seize on smaller competitors, snapping up assets while
prices are low.
If it does that, Exxon may have even
more quality assets than it does now in a couple of years, emerging
from this whole bear market better off than when it came in.
And speaking of bear markets, Exxon is a fixture in many portfolios —
Warren Buffett's, for instance.
It's not a stock people
day-trade or flat-out dump when times get hard.
It's a stock people
hold onto for decades.
So if the Fed starts hiking interest
rates as planned, it won't get beat up the way more volatile stocks
do.
It will generally hold its value,
all the while paying out a sturdy dividend.
Remember, Exxon has paid
uninterrupted dividends for the past 103 years.
And it's raised the payout in each of the past 31.
That's
the kind of investment I'd focus on right now.
Oil prices may
fall a little bit further, but there's not much lower they can go.
At the worst stage of the financial crisis, they
didn't manage to break $30
per barrel
and it's not likely things will be any different this time around.
Take any further weakness
as a buying opportunity - But You Better act Fast - As Today I Heard that Oil
News; Oil Is Already Going Back up - especially so quickly after the recent market crash and I new it wouldn't take long so be quick and act fast before it's to late!!
You
won't regret it!
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