How to Invest in Energy Mutual Funds

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To invest in energy mutual funds, decide whether current energy use trends will continue and purchase mutual funds that include oil, natural gas, coal and alternative fuel. Consider investing in open-ended funds or electronically traded format energy funds with advice from an investment consultant in this free video on investing.

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Video Transcript

Hello, I'm Roger Groh of Groh Asset Management. We're here today to talk about energy mutual funds. Do you think that the price of gasoline that is going to be going up over the next five years -- are you concerned about it, or have you decided that you're going to try and benefit from any increase that may come from energy prices going up? Well, one of the ways that you can do that is by purchasing a mutual fund which is dedicated to buying stocks which are involved in the oil and natural gas business. Some of those funds are open-ended, some of those funds permit the managers to go and actually buy oil wells directly, and some of those funds trade in ETF form -- or electronically traded format form -- which are, really, they look like stocks but they're made up of many different stocks underneath them. So if you have a little bit of money, look for ETFs. If you have a lot of money, perhaps look for a blend of direct and normal, traditional mutual funds. Now, what's a reasonable direction for oil and gas prices to go? Ah, that's the 1,000 dollar question. If you believe that the general consumption patterns in oil over the last 10 years are going to continue, meaning there are a lot more people, they're going to be driving more, and they're consuming more energy, it seems to us that the likelihood is that prices will, again, move up. That may include coal, though, as part of the mix. And certainly, coal companies can be part of energy mutual funds. One other thing to consider: Alternative sources, which are quickly becoming maybe the darling of the world. Whether it's wind or solar, but don't worry. They also can be included in whatever funds that you buy. So does...what does the future hold? Well, probably we're going to drive more, probably we're going to use more and probably we're going to need more energy. Energy drives prices. Hi, I'm Roger Groh, and that's a little bit about energy mutual funds.


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