How can energy drilling investments reduce the overall portfolio risk within my portfolio?
Energy drilling is an asset type that is not highly correlated with stocks or bonds; in fact it may be negatively correlated under most economic conditions. When the stock market is falling, many times both stocks and bonds are falling. By adding an allocation of energy drilling investments to your portfolio, you may benefit from an asset type that does not typically follow the stock market. Sometimes you will see the price of oil and natural gas move in sync with stock and bond prices, but normally this is observed for short periods of time or if the economy is being threatened with a recession or depression. A recession is not good for much of anything. Even though the price of oil or natural gas may be falling, the production of oil or natural gas from the well should still be producing cash flow to your portfolio. What is the best way to participate in energy drilling? One of the best ways to participate in energy drilling is to consider investing in multiple wells rather than just
