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Getting Started With Oil And Gas Mutual Funds

March 06, 2012 | Comments: 0 | Views: 278

Oil And Gas Mutual Funds

With the rate at which fuel prices have risen over the years, oil and gas mutual funds have now become an excellent form of an investment. Finding good companies for these investments, however, isn't always easy. Investing in energy requires that an investor know how to properly watch over the market, and be able to take action when the time is right. If this sounds like you, you could have a future in the energy sector.

Choosing An Advisor Or Online Account

When it comes to investing in oil and gas mutual funds, you will have to make a decision on whether or not to go through a personal financial advisor, or begin an online trading account. This can be a hard choice to make: having a financial adviser to guide you is extremely beneficial, but it can be costly. And while you'll save money with an online account, and be able to move through researching the different mutual funds at your own pace, there is a lot of room for error if you're a novice investor. No matter the option you choose, you'll want to look for a no load fund so that you can avoid as many extra fees as possible.

How To Handle Oil And Gas Mutual Funds

Good funds will have successful 10, 5, and 1 year gains. Sometimes the one year outlook isn't very good, which will tell you what's going on with the fund at present. Due to the multiple factors that the price of oil is influenced by, these kinds of mutual funds can be risky. The right moves, however, can lead you to a very profitable investment. Keeping a close eye on the economy, as well as politics in the Middle East and North Africa (as they have an effect on oil prices) will help you to be prepared. When prices sink, purchase as many shares as you can -- within reason. At some point the price of oil will rise, and you'll see yourself profit.

The ProFunds UltraSector Fund

One particular example of good oil mutual fund is the ProFunds UltraSector Oil & Gas Investor Fund (ticker symbol ENPIX). This is a good way to break into the oil and gas sector. ENPIX has returned 19.2% in 2011, following a 25% return during 2010. One thing to always keep in mind when investing in energy however, is just how much you're risking. Don't put any money on the line that you can't afford to leave behind. That being said, secure any and all emergency and mortgage funds before you begin your excursion into the energy market.

Connor Swinney is the owner of the What Are Mutual Funds website. He created the website to be used as a resource for people who are looking for more information on Top Mutual Funds or that would like to know how they can create a successful investment strategy.

Source: EzineArticles
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