# Best Way to Invest in Oil?



## gocanada (Jan 3, 2014)

Hey all,

What would you recommend as the best way to invest in oil? I was looking at USO. Good choice? 

Thanks!


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## supperfly17 (Apr 18, 2012)

gocanada said:


> Hey all,
> 
> What would you recommend as the best way to invest in oil? I was looking at USO. Good choice?
> 
> Thanks!


Nobody knows. Do what makes you feel comfortable.


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## daddybigbucks (Jan 30, 2011)

did you go thru the down cycle in 2008?
this will probably run along the same lines. 
I am using what I learned in 2008 to use on this oil cycle. Albeit, this is a slower downturn but I think principle will be the same.


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## gocanada (Jan 3, 2014)

Hey daddybigbucks,

No I didn't. Would you mind elaborating a bit?


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## CPA Candidate (Dec 15, 2013)

I'd say the best way to approach it is to wait and see.


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## 1980z28 (Mar 4, 2010)

CPA Candidate said:


> I'd say the best way to approach it is to wait and see.


+1


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## daddybigbucks (Jan 30, 2011)

gocanada said:


> Hey daddybigbucks,
> 
> No I didn't. Would you mind elaborating a bit?


it would be hard to explain the patterns that I see depending on the kind of investor you are. 
But I would agree to wait and see and try to find your own pattern.
Hindsight is 20/20 and try to learn for the next bust.
I would also recommend to read as much as you can about what people smarter than you are doing.

I assume you are talking about USO traded on NYSE?
I remember everyone flooding to that after the last bust as well.


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## My Own Advisor (Sep 24, 2012)

_*The best?
*_

Likely an indexed fund.


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## gladaki (Feb 23, 2014)

My Own Advisor said:


> _*The best?
> *_
> 
> Likely an indexed fund.


Index vs dividend investing always a tough choice to make.


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## gladaki (Feb 23, 2014)

rikk said:


> Fwiw, I just added some at $20.27, WTI at $53.40 ... a buy and forget till at least end of 2015 I'm thinking.



Its interesting it is on its hovering around lowest in last 8 years.
I hope Canadian O & G will react to global oil prices. Suncor is going up even with falling crude prices


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## Greyhound86 (Feb 21, 2010)

The contango effect might erode your returns if USO is held for a long term. 

Holding a basket of oil related equities might be easier.


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## Getafix (Dec 29, 2014)

Which Oil stocks would you guys buy if you had an extra $5000? Companies that you think are stable enough to survive this crisis. How would you rate these picks:

Suncor - SU
Husky - HSE
Crescent point energy – CPG
Canadian Natural Resources - CNQ
Cenovus Energy – CVE
Canadian Oil Sands – COS


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## james4beach (Nov 15, 2012)

I do not recommend commodity ETFs such as USO. These face a few problems: (1) tax complications and uncertain tax treatment since they're based on derivatives and the government has not quite figured out what they want to do with them, (2) a history of under-performance. USO is notorious for its chronic underperformance. 2007-to-date, USO is down -65% while WTI spot prices are only down -20%.

I think a stock index like XEG would be better, if you really want to be "long oil". I don't recommend picking individual stocks.

But don't you already have enough energy exposure through your TSX Index core holding? And if you factor in secondary effects like the earnings/M&A hit to banks, your existing Canadian investments are already tied to oil.


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## PatInTheHat (May 7, 2012)

For the long term buy any of the big cap low cost per barrel tickers; SU and CNQ would be ideal. As James mentioned I would avoid USO and especially any of the x2 or x3 ETFs unless your time frame is very short.

Personally I have been buying some of the extremely beat up names like LEG but there is serious risk and its very unlikely this is a long term hold for me as I will cut it very quickly if oil continues to decline.


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## Synergy (Mar 18, 2013)

Getafix said:


> Which Oil stocks would you guys buy if you had an extra $5000? Companies that you think are stable enough to survive this crisis. How would you rate these picks:
> 
> Suncor - SU
> Husky - HSE
> ...


I'd go with SU, CVE or CNQ if you're a stock picker, or XEG if you're an indexer and want a little more exposure to oil. If you're looking for income then you could take a wager on CPG. If we get $25 oil, I think they're all up **** creek without a paddle:cower:


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## Feruk (Aug 15, 2012)

Index funds are not the right way to be investing in oil in a downturn IMO. Buy a couple of the big guys in the sector that are not debt consumed and call it good. Lots of good suggestions in the thread already.


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