Should You Buy Aphria (TSX:APHA) After Its Recent Pullback? This negative supply shock for Canadian … Final Thoughts. This article explains how to invest in oil with money through stocks, ETFs, and oil futures. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you. This makes Baytex a company to avoid by all but the most risk-loving investors out there. Prices had been decimated for five years. That’ll give you a hefty portion of food for thought when it comes to building a balanced, diversified portfolio that works for you. Renowned Canadian investor Iain Butler just named 10 stocks for Canadians to buy TODAY. The Motley Fool Canada » Energy Stocks » Successfully Invest in Oil With These Two Strategies, Chris MacDonald | March 7, 2020 | More on: CVE. Please read the Privacy Statement and Terms of Service for more information. Should You Buy Aphria (TSX:APHA) After Its Recent Pullback? Whichever you choose, either route will save you loads on money on fees and is an excellent way to start investing. Producers borrowed heavily to acquire other companies or expand production capacity. That certainly paints a bleak picture for oil investors. Commodity prices seemed to be an afterthought (mostly because prices remained elevated). In March, the benchmark for West Texas Intermediate (WTI) oil dipped below US$30/barrel. Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group. And how do you invest in oil with little money? Not to alarm you, but you’re about to miss an important event. The ETF’s attempt to track the benchmark will be imperfect, and during periods of intense volatility, the ETF may lose track of the benchmark because it is really buying future contracts and not the commodity (a barrel of oil) itself. All rights reserved. Renting in your 20ties Will Help Your Retirement, Variable vs Fixed / Open vs Closed Mortgages, Using RRSP for Your Mortgage Down Payment, Buying A House in Canada: A Guide to Buying Your First Home, Plus, you can take advantage of our exclusive promo offer: open a new Wealthsimple Trade account, and. © 2020 The Motley Fool Canada, ULC. It’s important to read the financial statements of the companies you’re considering investing in, and modeling out what their breakeven price of oil is to determine how risky of an investment you’re making. There’s also the United States Oil Fund LP (USO), which tracks the West Texas Intermediate (WTI) benchmark. The price-to-earnings ratio matters because it provides a measuring stick to compare whether a stock is overvalued or undervalued. Investing in oil today might seem like the ultimate contrarian play for stock pickers, but that hasn’t always been the case. Investors need to be careful when trading commodity ETFs because prices can swing wildly. Or try out Wealthsimple Trade – a mobile-trading platform that offers zero-commission stock and ETF trading. Value investors can use the P/E ratio to help find undervalued stocks. JOIN THE FINANCIAL MOVEMENT! This negative supply shock for Canadian producers has been exacerbated by a very negative demand shock from the coronavirus outbreak. If you wish to learn more about the case for oil be sure to read The Fundamentals of Investing in Oil. Investing in oil right now is a true contrarian play. It’s not as straightforward as it may sound. Thinking about investing in oil? Sure, oil companies are some of the most valuable companies in the world, and there’s a never-ending need for “black gold” in the economy. Simply click here to discover how you can take advantage of this. Investors seem to be pricing in significant insolvency risk at these levels. Those who invest now, with prices depressed by 60-70% might be poised for major gains. Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada. Whether you’re investing in individual oil stocks, oil and gas ETFs, or making a play on oil futures, just know that you’re taking a major risk by betting on an industry that’s currently on life support. Plus, you can take advantage of our exclusive promo offer: open a new Wealthsimple Trade account, and get a $10 cash bonus + $0 commission trades. 37% OFF: Buy Pembina Pipeline Stock Right Now for an 8.8% Dividend Yield. Compare that to the broader TSX/S&P Composite Index, which is down just 9.8% in the same time period. Besides the oil sands, Canada has one of the hottest oil plays in North America: Alberta’s Cardium Formation where several intermediate and senior Canadian companies are operating. While I don’t advocate picking individual stocks, I can’t begrudge an investor who wants to allocate a small portion of his or her portfolio to betting on certain companies or sectors. Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group. It’s certainly not impossible to imagine a future where oil prices return to their previous highs and an investor can take advantage of the recovery. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you. I understand I can unsubscribe from these updates at any time. Returns since inception, October 2013.

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