Why You Should Never Invest in Oil & Gas Companies Long Term
As far as portfolio is concern, we should always regards Oil and Gas companies as risky investments for a really simple fact: They are very dependent on the Oil Price. For this reason only, we should pay close attention to these companies which can generate considerable profits in a cycle. Things to take note: 1. Invest them within the cycle 2. Don't be greedy and buy and sell according to the plan. 3. Stick to the plan. Let's collate the data for the past stock prices of the 2 O&G companies against the WTI data. The portfolio strategy used: 1. Based on the WTI, we experience the Oil Price cycles peak to peak within a 3 to 4 year periods. 2. Have a target set of how much profit you want to get with the cycle of 3 to 4 years. For this portfolio we target 20%. 3. Only buy reputable and well establish O&G companies. You can consider drilling companies but they are way too volatile for most investors. 4. We can see 2 extreme cases here in Schlumberger and Transocean.