It's black, dirty and a part of almost every topic on TV or in the newspaper. It is not pollution although some cannot talk about it without talking about pollution. The subject is oil and these days, oil investment is looked on with the same disdain as oil itself. While the oil economy has become so huge that it boggles the imagination, oil investment itself should be considered by traders as a big opportunity for them as well.
An unnamed environmentalist once compared the oil companies and their executives to the heads of the tobacco companies who used harmful additives and denied that cigarettes were a threat to health. Without turning this into a moral forum, that simply isn't a valid comparison and while we might not like the huge salaries of oil executives, their business approach is neither harmful nor addictive. The money management and soaring prices make for good business and good oil investment opportunities.
How are tobacco and oil executives different?
The environmentalist's statement was merely a headline grabbing comment. The tobacco companies got very rich concealing information that proved tobacco was harmful and included chemicals that made it more addictive. The oil industry and its executives are guilty of nothing like this and oil investment is not immoral either. They produce and sell the most important commodity in the world. Oil companies are among the very largest companies in the US and have posted the largest profits in the history of investing. Whether buying company stock or investing in oil futures, an investor can find ways to profit along with the oil companies by oil investment.
How is oil the most important commodity?
Think about it; sure you could say food is more important but the big picture proves otherwise. In modern America, only a small percentage of the population produces food; the rest buy their food at the neighborhood grocery. How does that food arrive at the grocery? It is brought by trucks that use oil and gasoline. The two biggest factors on the price of food are the weather and oil. If the weather is bad, food prices rise. If the price of oil rises, food prices rise as well. The same is true of nearly all other products as well; shipping costs can be almost as much as production costs and any rise in the price of oil is likely to be reflected in the price of the product. Oil investment gives a trader the opportunity to make money investing in stocks or futures of the most used and needed commodity in the world.
If you take the theory further, the world would be completely different today if it weren't for oil. Oil powers and lubricates the machines that build businesses, housing, hospitals and all of the other things we take for granted. Without oil most of the things we have today wouldn't be possible. A key to investing in the stock market is finding a company with a product that people need and nothing in the world is in more demand than oil. Oil investments capitalize on the most used commodity known to man.
Opportunities in Oil Investment
Oil investment is going to continue being a wise move, whether investing in corporate stocks or oil futures. Oil related stocks are typically among the best stock picks and the normal ups and downs of oil prices can be very attractive to those who trade futures.
Conclusion
Depending on your perspective, the oil industry is not the evil empire that it is portrayed to be and oil investments can be very attractive. Whether stock investing or commodities trading, oil can be an excellent addition to your investment portfolio. Do your technical analysis, consider your trading plan and make your oil investment work for you.