Best Oil and Gas Mutual Funds

Rising fuel prices make investing in oil and gas more popular then ever before. But finding the best oil and gas mutual funds can be tricky business. Playing in energy requires knowing what you are getting involved with and a strong ability to monitor the market and know how and when to take action. If you have strong knowledge of the market and the ability to monitor your shares, then investing in oil and gas mutual funds can be a fantastic way to diversify your portfolio of investments.

Choosing how to Invest

Deciding whether to use your personal financial adviser or going it alone through an online trading account can be a tough decision. Getting the personal recommendations and advice of a trusted financial adviser can be costly but beneficial. If you’ve already been working with a financial adviser, then they know your financial situation and understand your portfolio and can help you make the best investment decisions.

Using an online trading account can be a little more cost effective, but you don’t get personal attention. However you can take your time searching through the options. You will be able to access several types of mutual funds and see which ones are performing well and which ones might fit your portfolio. You’ll be able to research and make decisions on your own time.

Which ever method you choose there are commonalities in how you should proceed. You should look for no load mutual funds so that you avoid lots of extra fees. The commissions and management fees that each brokerage firm charges is different, and paying attention to the funds that have the lowest associated fees is important. You want your investment to yield you a high return, not pad someone else’s wallet.

Choosing Oil and Gas Funds

When choosing a fund, look for one that has a good 10 year, 5 year and 1 year gain. While the one year outlook might not be so good, it can be an indicator of where prices and profit are right now.

The price of oil hinges on multiple factors and can make investing in an oil and gas mutual fund risky. However, with the right investments and right moves it can be one of the most lucrative investments in your portfolio.

Pay attention to the economy. Whenever the price of oil drops, it’s a good time to consider purchasing at least the $100 minimum. Keep an eye on the political climate in the Middle East and North Africa which tends to affect oil prices most dramatically. If you see prices sink, grab up as many shares as you can reasonably afford. We all know that oil prices will rise at some point and will make your investment profitable.

One Oil Mutual Fund Example

ProFunds UltraSector Oil & Gas Investor Fund (ENPIX) is one way to get into the oil and gas sectors.  Year to date the fund has returned 19.2% and that’s following a 25% return in 2010.  Not to shabby.

Remember though that dealing in energy is very risky, so never invest more then you can afford to lose. Be sure that mortgage and rainy day funds are secure before you start dabbling in the energy market.

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