Oil

I have been talking about oil for years. Years ago, I came across an article on the worlds oil supply versus demand, the conclusion is the world will reach the “halfway-to empty mark” around 2015 to 2020…driving prices higher and higher for oil. The United States, China, India, Russia, and Brazil are the known gas “guzzlers” of the world. Russia is already trying to plant flags at the bottom of the ocean (under the North Pole)…to try to claim whatever oil it possibly can for its citizens in the future. The United States should start getting on the ball and do whatever we can to plant flags all over the oceans floor, before all the real estate is gone! The world courts are going to favor the strong…just to avoid a world war. The next world war is going to either be about energy, or about energy & religion.

Ask yourself; “Do you think the price of oil is going up or down? If you just look at the demand versus supply…oil is not going down. If it does go down…it will only be for a very short time. In addition, oil companies are making a great deal of money by artificially manipulating the price of oil at the world’s commodities exchanges…they do not want the price to go down (for the long-term). You have to start thinking like an oil company…invest in energy and you will make money (even in a bear market).

The “natural resource mutual funds” sector has returned over 30% annually for the past 5 years. The overall category has a low P/E ratio versus other stock fund categories. You want a fund with a high percentage of oil (40% to 60%), and the rest of the portfolio in coal and gas (with some service related companies doing business in oil). Make sure the fund does not borrow from the bank and re-invest (often called leverage). You want to analyze funds which have exceptional returns each year for the past three years. It does not matter if the energy related stocks within the portfolio are well known or not…you just want prior positive consecutive returns. If you want to beat this bear market…this is a sector you should be in. Call your stock broker or financial planner and analyze the natural resource funds together.

Sincerely,

John Bagwell

The Truth About Financial Products.com

www.thetruthaboutfinancialproducts.com