Energy Stocks

Resource and commodity stocks in general should make up only a limited portion of your portfolio—say less than 20% for a conservative investor or as much as 30% for an aggressive investor. And as part of that segment, energy stocks could make up, say half of that total. The rest could be fertilizer stocks, mining stocks and so on.

Oil and gas stocks have been below-average performers lately, and many investors are tempted to get out of the industry altogether. However, the energy sector can play a crucial role in your portfolio as a hedge against inflation. The low inflation rates of the past couple of decades deserve some of the blame for the poor performance of the sector. However, energy stocks will likely rebound in years to come as the global economy recovers.

  1. Invest mainly in well-established companies;
  2. Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; Utilities);
  3. Downplay or avoid stocks in the broker/media limelight.

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Surging electricity demand, attractive valuations, and potential interest rate cuts are a few reasons to invest in utility stocks.
Top pick Cenovus Energy Inc. offers a low valuation multiple, substantial visible growth, a 3.2% yield, and improving operational leverage.
Imperial Oil has gained 1,728.5% for our investors since we first recommended it and yet it’s trading at a bargain 8.6 times forecast cash flow right now.
Helium stocks, often associated with balloons and airships, is not just about a light-hearted gas; helium is a vital element.
Suncor Energy Inc. offers a solid 3.9% yield as it continues to demonstrate both upstream and downstream operational excellence.
Secure Waste Infrastructure Corp. boasts a steady growth story but remains exposed to cyclical trends in the energy and industrial sectors.
Baytex Energy Corp. offers a solid 3.5% yield as it boosts cash flow with further gains on the way if oil prices keep rising.
Explore the global energy demand outlook to 2030 and beyond, including trends in renewable energy, oil, and gas—and how investors can position their portfolios.
Top pick Cenovus Energy Inc. is trading cheaply and offering a high 4.3% yield as production rises and new projects will drive growth even higher this year.