Investing in oil: the most active market in 2016

If there is one thing that can be distinguished last year, it is not because of another circumstance than because of the collapse that oil has had in the main international markets. To verify the magnitude of this drop, it is only necessary to verify that in almost twelve months, the price of a barrel has gone from trading, around 90 dollars a barrel to 35, which is where the black gold currently moves, and to the despair of the investments that had taken positions in this financial asset during the preceding months.

Losses for an average shareholder in this stock market are around 50%. If you are in this situation, you will have no choice but to wait for the oil to recover in the next few months. Or on the contrary, sell your shares with significant losses, to try to compensate them with other values that have a more or less reasonable potential for revaluation.

However, not a few financial analysts show that during this year, the price of oil could rebound after having reached its lowest in the price. In this sense, the International Energy Agency is betting that its prices would stabilize, and could reach up to 50 or 60 dollars a barrel. Others, on the contrary, are more reluctant to these forecasts, which they call excessively optimistic.

In addition, there is the possibility that political instability in the Middle East can be translated into a global military conflict, which would have a direct impact on the prices of this financial asset. That they may even double the quotation on their current prices. From this perspective, there are not a few small and medium-sized investors who have oil on the radar. But with some caution, lest the downward climb continue in 2016.

How to trade oil?

One of the problems that arise to develop a defined strategy is to elucidate how you take positions on this financial asset. To help you develop the correct delimitation of your investment strategy, we will propose a series of actions, widely open to your interests, to take positions in the financial markets from now on. Not only through the bag, but through other products, some of them more sophisticated, and even innovative.

The most direct, and at the same time, simple way to make your savings profitable is through companies listed in equities that are closely linked to crude oil, in this case the oil companies. If the operation is going to be carried out in the national markets, it will be more difficult for you to carry it out. Not in vain, In the current offer, you only have a value of these characteristics.

It is about Repsol, and that it is in a difficult moment in its evolution on the stock market. Not surprisingly, some are being presented rumors that it could be the subject of a takeover bid by the big oil companies. Due to the strong discount it has in its prices, and that makes it very attractive to the large international oil companies. As a counterpoint, it presents one of the most generous dividends on the market, with an annual return of almost 8%. But his expectations are not at all hopeful, after having broken the support amount of 10 dollars, which means that he can continue with his significant decline in the stock markets.

The offer of oil companies is more plural outside our borders, where you can find a good bunch of proposals, all of them highly solvent, at least so far. Especially from the North American and European stock markets. And that can help you channel savings correctly if there is a rebound in oil prices. As a disadvantage, the fact that you will have to assume significantly higher commissions than in the national markets.

Other financial products

If you are one of those people who are not convinced by the stock market to operate with this important financial asset, don't worry, because you have other designs that are especially suitable for this special kind of investment. Nevertheless, They will require prior knowledge, but above all greater learning to operate with them.

One of the investors' favorites is mutual funds that are tied to crude oil.Either through oil companies, or through the price of crude oil in international markets. The main advantage is that the investment is diversified, as it includes other types of investments, both variable and fixed income. And in this way, you protect yourself from possible turbulence in your price.

The offer is not very wide if you operate from Spain, but at least you have a small selection of funds that keep this feature. With cheaper commissions than in the stock market, and with the possibility of being able to make transfers, in case things don't go as you would have liked. Your gains will be less than doing it directly on oil, but also the losses will be less acute.

Investment models with higher risk

If you are an aggressive investor, congratulations, because you have before you a series of proposals that can make you earn a lot of money, but also lose it, and abundantly. They also require a deep knowledge of them, and that will make you consider this alternative to invest your savings during this year that has just begun. If you like risks and strong emotions, go ahead with it, because offers are surely not lacking.

ETFs are one of the most suitable financial products to operate with this asset class, because it is about a mix between buying shares on the stock market and mutual funds. Although under very suggestive commissions as a result of the offers of the banks to promote these products among their customers.

There are countless models that EFFs present to operate with black gold, and of diverse nature, depending on the profile you present as an investor. It is a very suitable strategy to collect possible increases in the price of your quotation, and to which you should be very attentive, in case the evolution is not favorable. In return, it is a product that is not excessively complicated and that you can formalize from any financial institution in the country.

With greater insecurities

Other products, on the other hand, may not be the most suitable for your profile as an investor. Mainly because of the excess that their operations entail. But also because you don't know how to operate on them. One of the options is to invest your savings in the markets where oil is traded. For this you will have to go abroad, mainly in New York and London squares. It will surely be very complicated for you, and on top of that you will have very high commissions, and change to other currencies (dollar, pound sterling ...).

Warrants is another possibility you have, but with an even higher degree of sophistication. They can generate certain problems if you operate with this special product. It is also a generator of large capital gains, but no less true that you can lose a lot of money with them.

Keys to invest with guarantees in black gold

In any circumstance, what will never come to you again is a series of tips that will help you channel your investments, and not least, to protect them in the best possible way. If you apply them correctly, you will have managed to place yourself in a better scenario to carry out the movements in the financial markets.

1. Invest only in the products you know: Given all the offer that you have in front of you, you must formalize the financial products with which you are most familiar, and understand all their mechanics to operate with them.
2. Don't invest a lot of capital: your operations will be carried out under amounts that are not excessively high, and that in any case, do not represent more than 30% of your savings available for this particular kind of investment.
3. Take positions if the trend changes: only if this condition occurs should you apply your strategy, whatever it may be, to develop it with greater guarantees, and you cannot be disappointed.
4. Choose the ones with the least commissionsn: Due to the wide range of financial designs that you can hire at the moment, it would be reasonable to opt for those with the least expansive commissions. In this way, save some in each operation you carry out.
5. Knowledge of these markets: it is clear that if you want to take advantage of the business opportunities in this market, you will have no choice but to provide very in-depth knowledge, if you want the operations to be developed under the expected channels.
6. Diversify it with other assets: you should not focus exclusively on oil, it would be a serious mistake that you could pay dearly for it. To protect yourself, it is most advisable to include this raw material in an investment portfolio, together with other financial products (bonds, deposits, stock market, etc.).
7. Let yourself be advised by the professionalsIf you do not want to make mistakes, you can choose to have a financial advisor advise you, and even direct, all the movements that you will undertake to make your assets profitable with greater success, and at the same time effectively.
8. Set yourself achievable goals: do not try to improvise in these delicate markets, it is not a good strategy. On the other hand, if you set realistic objectives for your investment, there is no doubt that it will help you meet them. Under strict discipline, and above all a lot of patience and cold blood. Not surprisingly, nerves are never optimal advisers to maintain positions in any of the financial markets, and even less so in this one, which is more complicated.