High Energy Investments

Earlier this week, I spent several hours driving to visit my family in North Carolina. ๐Ÿš—
To my dismay, I was unable to buy gas at several service stations. Lines of cars idled nearby, with many fearing they might be stranded for weeks. One station attendant told me that the price of gas had risen 14 cents per gallon in just one day! ๐Ÿ’ธ
This latest shortage in gasoline was blamed on a pipeline hack, but it’s also a predicter of things to come. As prices for commodities continue to rise throughout the country, greater demand is going to be placed on energy, particularly oil.
Some market commentators have given poor predictions for oil companies, believing the new green energy revolution will render them obsolete. However, oil and other energy commodities are still in high demand, and they will continue to be well into the future. Fiscal stimulus plans and low interest rates have increased demand for many commodities, but energy products will be some of the best performers. ๐Ÿ’ฒ
Petroleum is used for more than just transportation. It’s necessary for the production of everything from plastics to cosmetics to medical devices. ๐Ÿงผ๐Ÿงด๐Ÿฆพ
Oil is partly responsible for the incredible standard of living we enjoy today. Furthermore, inflation will benefit this commodity to an even greater degree than others. Consumers can cut back on the amount of driving they do, or carpool to save money. However, transportation demand can only fall so far. Large amounts of energy consumption originate from companies that transport food and other consumer goods. As the price of oil rises, the cost of these products and the cost of transporting them both rise, too. ๐Ÿšš
If you want a greater inflation hedge, you might consider supplementing your savings with a well-diversified portfolio of energy stocks in a low-cost ETF or mutual fund. This would be a good strategy as we head into more inflationary times.
Have a great weekend, and I’ll talk to you again soon!

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