Should You Invest in the Oil Industry?

When it comes to the investment world, it is constantly changing, day to day. Though this is part of the reason so many investors get into the field, both personal investors and brokers, it is also a reason why some people decide to put their money elsewhere. Due to a constant change with stocks and other investments going up and down pretty regularly, you’ll find that making the decision to invest is harder than you would first imagine. One of the big decisions you’ll come across is whether or not it is a good idea to invest your money into the oil industry with the help of a company like Southlake Resources Group whose experts help build partnerships between investors and oil drilling operators. Because there is no cut and dry answer to this question, it is important to look deep into the industry first, as knowledge will help you make a better decision.

Oil Stocks

A very popular way to invest, owning stocks of any company basically means that you own a small portion of that particular company. This is the same when you own stocks with companies such as Chevron or ExxonMobil. Buying and owning stocks is a great way to easily immerse yourself in the investment world and to participate in the price fluctuation of oil itself. You can buy stocks either through your online broker or financial advisor or buy them yourself without any outside help. Lots of people choose this route over other investment routes due to the fact that as you wait for your stock to rise, you can find yourself earning as nice dividend from the company that your stocks are in. However, it is very important to keep in mind that dividends are never guaranteed.

Oil ETF’s

Another easy way to invest in oil is to buy a few oil ETF’s. This form of investment is similar to stocks in that you can trade them on major stock exchanges and you can buy them from your online broker or financial advisor. On the other hand, you’ll find that ETF’s don’t always follow the flow and price movement like stocks do. Though this may sound odd, it is because ETF’s are really you deciding to buy future oil contracts. Because contracts change all the time, with some of them expiring for one reason or another, you’ll find that that particular contract is then replaced by another, this time at the current market price. Because of this, generally you’ll want to look at oil ETF’s as a quick commodity trade, one that last less than 30 days. If you do a short trade like this, you’re much more likely to find a good return then if you used ETF’s for long term investments.

It is thought by many that oil prices will rise soon, making this a great time to invest in oil, before the prices venture up. By investing now, you’re giving yourself a better chance to reap the benefits in the long run.

Leave a Reply

Your email address will not be published. Required fields are marked *