Direct and Indirect Investment Options for Oil

Direct and Indirect Investment Options for Oil

For qualified investors looking for oil investment opportunities, there are many avenues to get started. Oil investment opportunities come in different forms with varying levels of risk. There are direct and indirect investment opportunities that you can choose according to your capacity to invest and risk tolerance. Before investing in the oil sector, it is advisable to do your due diligence by researching the risks involved and the growth potential. Read on as we discuss direct and indirect investment options for oil.

Why Invest in Oil?

Crude oil investments can be a great way to create long-term passive income with huge growth potential. Energy sector investments have a low correlation with stocks and bonds. This helps investors in protecting their portfolio from short-term market fluctuations. Careful oil investments not only have great growth potential but also offer massive tax benefits. There are two ways investors can approach the oil sector: Direct investment options and indirect investment options.

Direct Investment Options

Oil Futures

Oil futures are contracts in which you exchange a certain amount of oil at a fixed price on a particular date in the future. Oil futures feature a high degree of risks, which is why you need to invest only after you have done your homework. Investors can buy oil futures at advantageous prices and protect themselves against bad oil price movements.

Commodity Based Oil ETFs

Commodity-based oil exchange-traded funds (ETFs) can also be a great form of direct investment in the oil sector. You can purchase oil ETFs from the stock exchange just like any other stock. Investing in ETFs offers daily investment results based on the percentage daily change in oil prices.

Indirect Investment Options

Energy Sector Mutual Funds

Energy sector mutual funds can give you indirect exposure to the oil market. They are the funds that solely invest in stocks of oil companies and pose a lower risk as compared to investing in specific oil company stocks.

Energy Sector ETFs

Energy sector ETFs invest in stocks of oil and oil services companies. There also are ETFs that do not just invest directly in oil companies but also in oil drilling and exploration companies, all of which come with comparatively lower risks.

Wrap Up

Investing in oil companies can be lucrative, provided you have done your research to make an informed decision. If you are not familiar with oil markets, you should partner with an oil investment company that can help you identify oil investing opportunities with great potential. When looking for oil investing opportunities with huge revenue generation potential, then look no further than Main Oak Capital. Our investment experts will help you find the best investment opportunities through in-depth analysis of the performance and growth potential of available options. Talk to one of our investment specialists at (972) 544- (1645) or email