How to Invest in Oil with the US Oil Fund

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By Tommy Smith
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The U.S. Oil Fund ETF (exchange traded fund) can be a great way to invest in oil without spending much of your investment dollars. In fact, I'll show you below how to start with any amount. The U.S. Oil Fund (Ticker USO) seeks to reflect the performance of the spot price of West Texas Intermediate (WTI) light, sweet crude oil.

Difficulty: Easy

Instructions

Things You'll Need:

Money to invest which can be as little as $20.

Step 1

As an ETF, USO can be purchased through any brokerage firm. I recommend ShareBuilder for smaller investors. An account can be opened with no minimums and the purchase is made with only a $4 commission.
Step 2

After setting up your brokerage account you simply pick USO as your investment choice. Follow the directions at your firm. As I said before, ShareBuilder has no account minimums and you can invest one time or monthly.
Step 3

With the recent decline in oil prices, investing now in this fund can produce a decent profit later. By investing a little each month you engage in what is known as dollar cost averaging. If the price of the fund increases or decreases the average cost of your shares will help you endure the market movement.

Tips & Warnings

Because the U.S. Oil Fund ETF is non-diversified, it is highly recommended that you invest no more than 5% of your total portfolio.
Consider your own risk tolerance when investing in any security.

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