Oil Investments Are Predictably Unpredictable
Oil companies are the elephant in the room.
The wide trading range and erratic movement of oil prices has been perplexing to pundits, investors and motorists alike. Prices go down, they go up, and they go nowhere.
You're not hearing bold prognostications or definitive explanations about either oil prices or oil-company stocks. Better to simply wait quietly for everything to play out, most rational people reason. When that will occur, however, no one knows for sure.
Yet everyone is couching their bets -- if they bet at all -- because they've been burned too many times before.
"I think the price of oil in a year is going to be higher than its recent range of around
In this environment, investors have seen oil stocks decline even as most other energy stocks have risen significantly. Not that behemoth oil companies receive much sympathy from anyone other than their own investors.
Potential investors, on the belief that eventually oil prices always rise, are wondering whether the time is right to buy oil stocks at their current prices.
"As soon as oil bottoms, it starts to rise, and the best performers are always the exploration and production companies and the oil services companies," Parker said. "The major oil companies lag, but as the cycle continues they benefit and claw their way back."
While a weak economy won't last forever, it continues to take a toll.
"The demand for fuels really dropped due to the downturn in the economy, with people not driving and also a lack of industrial demand," said
In this environment "cash is king," noted Vital, so look for companies with strong balance sheets to ensure they can weather the storm and take advantage of market opportunities. They should have a mix of oil and gas operations with contracts 20 to 30 years long, providing greater earnings stability and a dividend as well.
The super-major oil companies best fill that bill, with Parker and Vital recommending the following:
"The stock prices of these companies have lagged, but as the economy recovers and demand heats up they will be good stocks again," Parker said.
Moving down a notch in size but with good growth in oil reserves and solid future expectations are companies such as
"Everyone should have exposure to energy, but the question is whether it should be more or less exposure than energy represents in the overall market, which is about 11 percent of the
He is adding to his fund's shares of
Rollingson's favorites among the oil and gas drillers are
Rebuilding Your Investment Portfolio
Markets have managed to claw back from the worst crisis in decades to rock Wall Street, but nearly everyone is still feeling poorer than just a few years ago. So where do average investors stand today when it comes to regaining all that lost investment, especially the millions of Americans nearing retirement age? In many cases, they're still digging out. And how long will it take to recover your losses? Maybe not as long as you think
Foreign Currency Investing: Now May Be the Time
If you've been trying to find a place to invest your money and are feeling uneasy with U.S. stocks and bonds, consider looking overseas. You should know that an increasing number of experts are encouraging clients to boost their holdings in international currencies -- a once-rarefied market that's become more accessible to individual investors.
Know Target-Date Fund's Strategy Before Investing
Forget about resting easy. Target-date funds, billed as confidence-building vehicles that gradually shift your holdings into more conservative fixed-rate instruments as their date nears, have caused some sleepless nights. Investors stashed money in these one-stop retirement plans so they didn't have to worry about making their own allocation decisions. But it has become clear they need to better understand the basic
Mergers and Acquisitions Perking Up Again
Whether or not you're personally convinced that the recession is just about over, those in the big-buck mergers-and-acquisitions game are believers. 'It's all a sign you can't keep a good capitalist down and eventually greed will overcome fear,' said James Paulsen, chief investment officer for Wells Capital Management, Minneapolis. People are saying, 'Gee, not only are we not going to have a depression, but it looks like we're actually going to have a recovery.'
Festive Times for International Real Estate Funds
Let's get the party started: An overseas run-up in real estate funds is rocking. International real estate funds are up 38 percent in 2009, or about 100 percent above their market bottom in March, according to Lipper Inc. Global real estate funds that also include U.S. companies are up 28 percent this year.
Investing - Oil Investments Are Predictably Unpredictable
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