How to Invest in Oil & Gas

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When investing in oil and gas, monitor the economy, as oil and gas are commodities whose prices tend to correlate to inflation. Buy oil and gas stocks, which always promise to grow in long-term, with information from a portfolio manager in this free video on investing.

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Video Transcript

Have you filled the tank of your car up today? Hi, I'm Roger Groh with Groh Asset Management. Today we're talking about oil and gas and how you can participate in the overall growth and demand in that industry. Yes, we've all seen the price of gas at our pump, our local pumps, fall in roughly half over the last year. Well that's because we're driving a little bit less but also because oil and gas are commodities that tend to go up in price as inflation picks up and decline in price when inflation begins to go down. In terms of timing your investment, well if that's true and they do well when inflation picks up, watch the papers carefully because once real estate bottoms, then maybe inflation has a chance to pickup again, but there's no hurry. Oil and gas companies are inherently cyclical. Prices of oil and gas will probably go up as inflation picks up and decline as inflation declines. Now we're still in the decline stage so it might be a little bit early, but we all know longer term that demand is likely to increase globally and supplies declining. So that would seem to be a reasonable place to put money. But you can significantly improve your odds of making money by investing in oil and gas in countries where today people don't have many cars. Examples, China. Now there are many well known gas companies in China where if you invest today as people drive more and heat their homes and have more air conditioning and use natural gas, that you can improve your chances significantly be as demand will go up and if you can time that with an inflationary environment, should do pretty well. On the other hand in the developed markets, in the United States or in Europe, you got to think well there aren't going to be a whole lot more people here in 20 years than there are today and there aren't going to be a whole lot more people in Europe than there are today and there aren't going to be a whole lot more cars so where's the increase in demand going to come from? In fact we might argue that demand might go down as electric cars are introduced in the United States and through Europe. So be careful as you begin to buy these inherently cyclical very volatile companies. I'm Roger Groh and that's a little bit about buying oil and gas. Invest carefully, I'm Roger Groh. Thank you for spending a few minutes with me.


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