Whether planning for retirement or seeking financial freedom, money-conscious individuals know that they need a diverse portfolio of investments. With a seemingly endless variety of stocks, bonds, funds, and businesses to support, you might ask yourself, “are oil wells a good investment?” Generally, the answer is yes. There are many advantages of investing money in oil companies.
The primary reason to invest in oil companies is that oil is everywhere. Countries around the globe run on the stuff. Energy made from burning oil powers virtually everything on the planet from cars to furnace s. And, despite advances in renewable energy, the world’s reliance on fossil fuels is not likely to end any time soon. It is never a bad idea to invest is something that everyone uses.
For those who ask, “are oil wells a good investment,” there is no question that investing in oil companies can bring huge payoffs. Exploration companies are constantly drilling for new reserves. If they find one, investors make money, and lots of it. At any given drilling site, is not unusual to see investors make several times their initial capital investment. Also, while it is impossible to predict when a well will begin to make money, advanced drilling techniques generally bring returns quickly.
Those who invest in oil wells recognize that they need to do so as part of a diverse portfolio. This is because other stocks and bonds sometimes tumble when oil prices are high. If you pair your oil investments with other stocks, you will better shelter the economic downturn that sometimes follows high oil prices. You also might be able to realize tax benefits by investing in oil companies, giving your diverse portfolio an even better rate of return.
Are oil wells a good investment? Yes. Because everyone needs oil and it can bring big payoffs, oil wells are a smart part of any investor’s diverse portfolio.
