Different Ways to Invest in Oil with Low Risk

by | Feb 5, 2018 | Oil and Gas

Nearly everyone knows that an investment in oil can lead to lost of money down the road. However, with oil prices in flux and a volatile market for energy, it can be a bit stressful to jump in with both feet. Despite that, oil is still an attractive investment when you think long-term. And the good news is low risk oil investing does exist. We’ll tell you all about the different ways to do so below.

Exchange-Traded Funds
These are various company options, stocks, futures, or derivative contracts. Funds are safer and easier than choosing to invest in a particular oil company stocks. You also save on commissions due to the single price for a fund. On top of that, unlike many other investments, your capital gains taxes won’t incur until the fund is sold.

Oil Stocks
If you know a lot about the oil industry and have done your homework, you can also find affordable oil stocks that seem strong. Buying up one or two and keeping track of the market can pay off. You’ll receive dividends, which is great if you want something long-term. Often these dividends can be used to buy more shares which results in more dividends.

Mutual Funds
With mutual funds, you have a simpler way to invest and with a true low-risk. Many people don’t have the time or desire to keep up with highs and lows of energy companies every day. Mutual funds don’t require that upkeep. Instead there is a manager who does that work. They also offer diversity so if one thing goes down in price, it’s likely another will keep things on the up and up.

Major Company Investments
For low-risk, the big guys can be king. Why? Those companies, no matter how volatile the market, will find new oil fields, build on them, and sustain development. These large companies often benefit when oil prices go up, but also benefit from refineries when prices go south. It’s the best of both worlds.

Other Options
Interested in learning how oil investing works, but want to keep it to low risk oil investing? Crudefunders may be the program for your needs. We offer many programs of various sizes and prices that allow you to invest in the oil industry without a giant risk.

Latest Articles