20 May 2008 12:21
There is quite a lot of talk this morning (20th May 2008) about risk management.
It may be worthwhile to revisit the risk / return records for oil & gas producers SHARE PRICES for the past five years.
Considering ALL SECTORS of the stock market - and taking the AVERAGE for ALL companies in the oil & gas sector - the following historic information may help you decide where you would like to be:-
5 years - oil & gas - 7th in list - 150% av
3 years - oil & gas - 4th in list - 65% av
2 years - oil & gas - 6th in list - 15% av
1 year - oil & gas - 2nd in list (to oil equipment services) - 25% av
6 months - oil & gas - 1st in list - 18% av
3 months - oil & gas - 1st in list - 22% av
30 days - oil & gas - 1st in list - 16% av
Remember these figures are for EVERY company in the oil & gas sector - the good, bad and ugly!!!
Obviously the top 50 in the sector return considerably more than the bottom 50.
Yes, there are risks - but rely on the historic data to make the most informed and reliable choices coupled with your rsearch and current information.
In my opinion - no balanced portfolio should be without the considerable growth opportunities presented by the oil sector in general - with the vast potential returns - if you can get it right - BUT anyway - with a reasonably AVERAGE return over the longer term. Most of the older stats of course - are without the benefits of the current higher oil prices.
As always - DYOR and good luck