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.
- Invest mainly in well-established companies;
- Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; Utilities);
- Downplay or avoid stocks in the broker/media limelight.
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CENOVUS ENERGY INC....
Pengrowth has now accepted a takeover offer....
ENCANA CORP. $5.36, is a buy for the Resources sector of your portfolio. The energy producer (Toronto symbol ECA; Shares outstanding: 1.4 billion; Market cap: $6.7 billion; TSINetwork Rating: Average; Divd....
While output restrictions have lifted the price for Western Canadian oil, a lack of new pipeline capacity continues to limit revenue growth for producers, and gains for investors....
To address its debt load, the company has sold several less-important properties and aggressively cut its operating costs....