What is the outlook for energy stocks?
Most areas of energy offer opportunity right now, because oil prices are somewhat subdued, and natural gas prices are very low. Investment is being cut back, expectations are low, and refining margins are relatively low. In general, expectations are somewhat subdued; and that creates an opportunity to make money in energy stocks across the board. Some of the areas with the biggest potential would be U.S. natural gas companies, where people are concerned not only about the cyclical aspects of natural gas, but maybe some secular questions about price strength. Therefore, those companies, such as EOG Resources, offer some very good return potential currently. How do energy prices affect the fund? In the short run, a significant move up or down in the oil prices strongly moves the stocks in the same direction, all else equal. However, over time, the most important thing is what oil prices are, relative to what was expected heading into the environment. So if the oil price is $50 a barrel,
