2. Our natural resources and other sources of energy are
something that people use and need every day. They
power equipment in factories, run all electric and
natural gas equipment in our homes, and natural
resources are need to provide fuel for vehicles and
airplanes. It is obvious why energy is important, and
because it is something we all depend upon, it can also
be a good investment for those interested in expanding
their portfolio.
3. Just as there are many forms of energy, there are also
many forms of investments in energy. For example, you
can find a specific energy sector company and purchase
some stocks in that firm. Another option is to look into
energy exchange-traded funds or perhaps a mutual fund
with investments in energy-related companies.
4. Buying stock in a specific company can produce great
profits or great losses due to the instability of the stock
market. When investing in a specific stock, it is wise to
do a great deal of research and pay close attention to its
progress each day. Your financial advisor may have some
good energy stock suggestions.
5. Funds include many different companies or
holdings, and because they are diversified, the risk of
loss is lower. This is true of both mutual funds and
exchange-traded funds (ETFs). Of course, you can still
lose a good amount of money, as no investment is every
entirely safe. But generally a fund will produce some
steady growth and makes a great long-term investment.
You aren't always guaranteed a profit, of course, but you
will have the comfort of knowing that one company in
your fund can drop in value without significantly
affecting the total value of the fund.
6. Mutual funds and ETFs differ from each other in several
ways. One significant difference is that the value of a
mutual fund is set at the end of each day of trading, but
an ETF's value goes up and down during trading. So if
you decide to buy or sell your ETF shares, you might be
able to get a higher price in the middle of trading rather
than at the end of the day.
7. When you decide to invest, you can choose from
hundreds of different funds and stocks. Some of the
investments are in traditional sources of energy and
natural resources such as coal, petroleum and natural
gas. You also can consider investing in alternative fuel
sources, such as solar power or wind power.
8. In addition to the type of energy in which you wish to
invest, you also can invest in energy in different
geographic areas. You can invest in a China fund that is
concentrated on energy companies or an Africa fund
that focuses on energy or perhaps a fund or stock based
in the United States. While no investment is ever
guaranteed, energy and natural resources are highly
important so there are always plenty of opportunities
for investors.