In today’s society, oil is the basis of infrastructure, manufacturing, agriculture and transportation – seemingly everything. Although it seems like an expensive field to invest in, it can actually be very affordable with the right research. If you want to learn how to invest in oil companies affordably and safely, consider these four ways.
1. Crowdsourcing
Recently, it has become popular in real estate to crowdsource funds for large-scale projects. This model has become applicable to the oil industry as well, with some companies providing prospective investors the opportunity to invest in full-scale drilling projects and well installations. Even a small investment has potential for very high return once projects are successfully completed.
2. Stocks
One obvious way to invest in an oil company is to purchase stock. You can purchase stocks one share at a time, making it a great way to ease into the market. While this method may require greater patience to see somewhat low return, it will get your foot in the door.
3. Exchange-Traded Funds
Exchange-traded funds (or ETFs) are also a good way to get your oil investment wheel greased. This allows you to purchase a portfolio of many different oil companies, therefore lessening the risk of putting all of your money in one company. Again, this is an example of an investment that may not see great return right away, but it provides less risk and won’t break the bank as you learn how to invest in oil companies.
4. Crude Oil Futures
Another option for the prudent investor is to buy crude oil futures in anticipation of the price of crude oil rising. While it can be a volatile market, investing in futures can be ideal because of the high volume of daily trades.
If you’re a hopeful investor, consider these ways on how to invest in oil companies for a successful and profitable undertaking.
