How to Balance an Investment Portfolio
The risks of investing can be immense, especially when markets are volatile. Energy investing is high risk because the commodities, such as oil, natural gas, wind, and solar power are affected by much more than simple supply and demand. Environmental concerns, political climates, and shifts in policy have an immediate effect on pricing and supply. The decline in oil prices lately have some investors nervous. Those who plan on maintaining investments for the long term typically continue on the same course during times of uncertainty and wait for the markets to balance again.
New investors, those looking for high gains over a short period of time, and people who are relying on their portfolios to provide steady income during retirement may be looking to balance out the low oil prices with other energy investments. Natural gas is an excellent alternative to oil investments because the demand will increase as people look to decrease dependency on oil. Oil reserves are usually extracted from each source within eighteen months of drilling, resulting in the need for other wells.
Natural gas provides long-term resources from each pipeline or rigged well. That means companies that specialize in natural gas extraction get more for their money with each new development. Adding investments in the natural gas industry is likely to balance out investment portfolios for those who prefer lower risk. Another option is to select companies that provide supplies, transportation, and storage for commodities instead of owning the actual commodities. Those investments are not as affected by fluctuating prices.
Solar and wind power is also on the rise, albeit at a slower pace the gas. Getting in on opportunities early for these energy sources may produce high gains in the future. Deciding on which companies to back can be confusing as investors try to develop their own strategies. There are several online sites that provide advice, suggestions, and guidance when it comes to investing in specific industries. Some are available free of charge while some charge a membership fee for access to information. Compare sites, research the success of predictions made, and find one that offers a free trial before paying any subscription fees.