If there is a financial asset at the moment that maintains an upward trend, it is none other than oil. One of the most important listed on the financial markets. Above other raw materials of special relevance in the international economy. Not surprisingly, it can be a very propitious moment for you to turn over with this alternative that you have for investment. Because in fact, there is a lot of money that you can earn from now on if you formalize the operations correctly and in due time. Both in the purchase and sale movements.
Black gold is one of the financial assets that provides the best prospects for decision-making during this new year. Even above the prospects for the stock market in 2018. To the point that there are already many small and medium investors who are approaching financial products linked to this important raw material around the world. Perhaps it is one of the biggest business opportunities that you have throughout this exercise. By presenting an upward trend in the medium and long term out of all doubts.
But if crude oil is characterized as an investment by something, it is because its prices can change at any time and without prior notice. Any news related to its production can substantially alter its value in the financial markets. As has happened in recent years. With very abrupt movements that can tip their prices one way or the other. Not surprisingly, its high volatility is one of the common denominators of this financial asset of prime importance. Because it can also influence the pace that the economy can take from now on.
Oil at $ 65
At the moment there is one thing very certain and that is that black gold is trading around the $ 65 a barrel. A price level that was not seen since mid-2015. This in itself means that something is happening in this raw material. And of course from a positive point of view. Because it seems that everything indicates that oil price you can go to higher levels. Specifically, close to $ 80 a barrel and even higher if the conditions exist to continue this escalation in prices. In a few weeks it will be possible to know if this is the case or if, on the contrary, important corrections can be generated in the short term.
Of course, it can be an excellent entry level to take positions from now on. Although it will always be very prudent to wait for these purchase signals to be confirmed. Not only in the acquisitions and sales of shares in the stock market. But through other financial products of special relevance. For example, Investment funds the listed ones. They will serve, on the other hand, so that you correctly diversify your investments from these precise moments.
35% revaluation
Either way, the price of oil it has appreciated in the past year about 16%. Especially because of the momentum it has developed during the last half of the year. Where it has accumulated a good part of the increases in the financial markets. With an average profitability above 35%. Therefore, it is one of the most profitable investments that are developed from any financial asset. Something that you can take into account from now on if you want to turn all your investments around. Above other technical considerations and maybe even fundamental if this is your desire finally.
On the other hand, and with respect to its profitability, it is convenient for you to know from the beginning that this important financial asset is one of the most profitable in clearly bullish scenarios. The return that you can obtain is above other financial assets of special relevance. For example, buying and selling shares on the stock market or more recently with gold. However, you face volatility that is higher than all of them. Where so soon their shares rise 5% as the next day similar percentages are left. To the point that you have to be very aware of your quote. If it is not in this way, you can pay very dearly.
How to invest in crude oil?
Once at this point, what arises is how you can take positions through this raw material. It will not be as simple as in other investment proposals. If not, on the contrary, it will require more doses of imagination since their positions are open to a series of financial products that you did not have from the beginning. You can even formalize these operations from fixed income. Because in effect, there are term deposits that are linked to this financial asset and without you having to risk your financial contributions. You will always have a fixed and guaranteed return every year.
This kind of bank deposits They allow you to charge a fixed interest, no matter what happens to the price of black gold. Although under margins not very satisfactory for your personal interests. Among other reasons because it will not exceed levels of 0,75%. To improve them you will have no other solution than the price of oil reaches a minimum level. So that in this way you are in a position to achieve an interest close to 5%. Although from the negative point of view there is the fact that you will not be able to fully capture the rise in the price of crude oil. It is an investment strategy that is aimed at a more conservative profile than usual.
Purchase of shares in oil companies
The simplest way to position yourself in this particularly important raw material is through the equity markets. And very specifically in the stock market through the oil companies. In Spain the offer is very limited and only Repsol meets these characteristics. In this sense, you cannot forget that the national oil company is being one of the main beneficiaries of this upward cycle in oil. With one of the highest revaluations of the selective index of Spanish equities, the Ibex 35. In addition, it has a very interesting dividend distribution for small and medium investors.
But if you want to expand the offer to invest in this raw material you will have to go to other international markets. Where the supply is much denser, as in the case of the stock market in Europe and the United States. You will have many proposals to satisfy your demand to make the savings profitable in this special way. With a level of revaluation in this year that goes from 15% to 30%. Conforming as one of the most active and profitable sectors of the international financial markets. You can take advantage of the excellent oil situation to open positions from these precise moments.
Exchange Traded Funds: Crude Based
Another of the alternatives that you have at this time is through ETFs, or exchange-traded funds. It is a financial product that combines mutual funds and the purchase and sale of shares in a bag. However, it has the big problem that it does not capture all the intensity of the climbs. Mainly due to the fact that it has as a reference point, not the real oil prices, but an estimate of them. This is one of the reasons why, although this financial asset may rise, the price is not included in this financial product. Where there is a very relevant gap.
On the other hand, ETFs allow you to opt for various strategies in this type of investment. From more global approaches where investments are made in oil companies located in different geographic areas or more focused on just one. As for example, in the Russian market You are so tied to this important staple financial asset. The alternatives that are open to you from these savings models are very wide. Although it will always be convenient for you to contribute a greater financial culture than in other less demanding investments. It will be a very useful measure to operate in this kind of markets based on this raw material.
Investment funds are also open to oil operations. From simpler approaches of using. Although in this case, they will be combined with other financial assets. Coming from both equities and fixed income or even from alternative models to diversify the investment more effectively. Of course, there are many investment funds that provide these special characteristics.
Where you will only need the decision to opt for the format that best suits your real investment needs. From the strategies developed by the managers themselves. That is, you will not have to do anything since it is a fully active investment model in most cases. That will depend on the profile you present as a small and medium investor. As simple as that.