Now I’ve been talking to you quite a bit lately about trading ETFs. About how they are much like mutual funds, but trade just like stocks, and how they can be a great way for a buy and hold investor to “dip his feet” into the world of trading. And with the economy the way it is right now, EVERYONE should be dipping their feet into trading, if not jumping in 100%!
Now there are literally thousands of ETFs out there. They can be based on anything. Indexes, collections of certain types and sizes of corporations. Tech. Banking… the list goes on and one. Today however, I’d like to just touch on the idea of adding a few energy based ETFs to your trading portfolio. With all of the turmoil with the fiscal cliff and the major breakdowns that Europe has been experiencing for years now, it’s safe to say the world economy is in the dumps. Things are obviously bad, and I believe they’re about to get worse. When times are bad, and there’s a lot of volitility, I like to start adding some asset based ETFs. Asset based meaning they’re based on a real asset. Assets like Pharmaceuticals, food, fertilizer, gold, silver, platinum, paladium… and especially energy based ETFs. Oil and Natural Gas ETFs have been particularly interesting lately.
Natural Gas for example has peaked in 2008, and since then has been pretty, well, not very exciting.
Natural gas prices have fallen about 80% since then and the commodity remained under pressure as new supplies of the key fuel were continuously brought online, making the historic oversupply situation even more of an issue