With prices coming off the boil it's tempting to buy a few heavily fallen stocks. But I'm going to hold off in case the decline continues. So I'm happy buying things for the long term such as gold related.
What about oil ? It's fallen steadily from US$75 levels to US$49 levels. Don't know how low this thing can go, perhaps to US$30 levels reached in 2016 or lower ? Might not fully engage into gear yet by fully investing but I might start to clutch in and start to bite with a small position at these levels for the long term.
Some pros and cons going through my mind for not going too deep into oil compared to say gold:
Pros:
- World still needs oil (industrialisation of China/India and other developing nations hasn't stopped)
- Renewables only make up a tiny fraction of the energy pie
- Other than costly and unpopular practices such as fracking, there hasn't been any major (Saudi Arabia size) oil discoveries of late and probably won't be since most of the Earth's surface has been explored except maybe the deepest of the seas
- Any political issues and military issues especially in or close to oil producing nations cause oil to rise and we've been in the most peaceful of times of late with alliances between the Saudis and Trump
Cons:
- Although slow to progress, new innovations like electric cars and other battery powered machinery is slowly taking a small slice of the oil based fuel (such as petrol, diesel) market
- Trump and Saudis could become even more best buddies and completely depress the oil market to levels not seen for decades even diving below 2016 low's
-Although insignificant at the moment, the renewable energy generation technologies could take off and take a bigger slice of the global energy pie
- A recovery in the nuclear energy markets could also put downward pressure on oil
If I'm planning to hold long term it's better to go with an oil ETF rather than taking on individual company risk by buying a stock. So purchased some BetaShares Crude Oil ETF (OOO).
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