Should I buy oil stocks now?

samantha87

Sun, Dec 13 2015, 5:34 pm

alef12 wrote:

You should not be taking financial advice from random women on the Internet.

1000% agree.

Still, DH thinks now is a good time, if you can figure out which companies won't go bankrupt if oil is $30-$50 for a few years. Like, which companies don't have too much debt and are making some money.

5mom

Sun, Dec 13 2015, 8:24 pm

Very few people make money on individual stocks. If you are looking for an investment, you would do better buying into an index fund. If you want to gamble and can afford to lose the money, go ahead.

5mom

Sun, Dec 13 2015, 10:38 pm

amother wrote:

How does one go about buying an index fund? Is it like Vanguard?

Vanguard and other big brokerage houses offer index funds. You can check out their website. You can transfer money from your bank every month or however you want to set up your buying.

The idea of an index fund is that it is a small sampling of the stock market as a whole. (Or just the S&P 500, or just tech stocks, whatever.) These kinds of funds almost always outperform actively managed funds, not to mention individual stocks.

No, I don't work in the financial industry. So feel free to do your own research. But slow and steady investment does much better than get-rich schemes.

Mrs Bissli

Mon, Dec 14 2015, 4:43 am

If you're a novice investor to equity market and have low risk tolerence, I agree the safer option is to buy an index fund, may it be from Vanguard or others. It would allow you to diversify (rather than investing in just one stock), at relatively low cost. Most index trackers are aiming to replicate S&P 500 (basically top 500 biggest companies by market capital). The only thing is, weighting of oil & gas companies had gone down to about 7% compared to historical average of low-teen% because oil company share price came down in line with oil prices. Now the index is about 20% IT, 16% financials, and 15% healthcare (because valuations in these sectors have surged).

You can make money buying individual stocks--or more correctly, a small portfolio of stocks, say ideally 20 or 30 different stocks. You can just open an execution only account at online brokerage like E-trade or Schwab. But you really need to have discipline to monitor news and performance of individual stocks.

Also there're big variance among what is termed oil stocks--ranging from oil majors to smaller independents to refiners to oil service companies to smaller/distressed drilling companies.