Oil ETF?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
Topic Author
mojorisin
Posts: 200
Joined: Sun Nov 27, 2011 8:19 pm

Oil ETF?

Post by mojorisin »

Yes, this is speculation on my part. Not part of my core asset allocation.

Is anybody speculating and buying any Oil ETF's to hold for a longer term bump? If so, what are you buying (which funds)?
User avatar
jfn111
Posts: 1377
Joined: Fri Nov 08, 2013 9:42 pm
Location: Minnesota

Re: Oil ETF?

Post by jfn111 »

I bought IYE for a quick play. I bought it for $42 something and just sold for $45. If it drops back to the $42's I'll buy it again.
Topic Author
mojorisin
Posts: 200
Joined: Sun Nov 27, 2011 8:19 pm

Re: Oil ETF?

Post by mojorisin »

I was looking at USO. However after doing more searching, determined not going this route. Looking at OIL instead.
ourbrooks
Posts: 1575
Joined: Fri Nov 13, 2009 3:56 pm

Re: Oil ETF?

Post by ourbrooks »

Search for the other threads which have discussed OIL; in the past, it has not tracked the price of oil very well.

Why do you think OIL or any other energy related ETF is a good investment now? Everyone can read the same web sites you read. If a lot of people thought energy stocks were a good long term investment, they would buy them now and drive the price up. They haven't. What do you know that they don't?

I'd agree that the price of oil will go up at some point, but that point could be five year or ten years from now. In the mean time, the money you put in the energy investments might be better off somewhere else.
kannankeril
Posts: 18
Joined: Tue Nov 10, 2009 10:51 pm

Re: Oil ETF?

Post by kannankeril »

I did load up on VDE. I look to invest in out-of-favor sectors using Vanguard sector ETFs. My energy allocation was quite low what with VDE on a seemingly perpetual climb ever since the low points in 2008. I am now over allocated on Energy.

Now if only the Utilities (VPU) & Healthcare (VHT) would follow suit, I might actually get a balanced portfolio. :wink:
veggivet
Posts: 1455
Joined: Sun Jan 25, 2015 12:07 pm
Location: New England

Re: Oil ETF?

Post by veggivet »

Hasn't VHT done very well over the last 1, 5 and 10 year periods?
kannankeril
Posts: 18
Joined: Tue Nov 10, 2009 10:51 pm

Re: Oil ETF?

Post by kannankeril »

Exactly, it's been flying high since 2011 and I have been waiting for a pullback. Looks like it's going to be a while. :D
toto238
Posts: 1914
Joined: Wed Feb 05, 2014 1:39 am

Re: Oil ETF?

Post by toto238 »

UWTI and DWTI. Triple leverage. Long and short. Go big or go home.

Actually, don't invest in Oil ETFs at all. They're really a poor investment.

I prefer to gamble at the casino. They serve you drinks and comp your room after you lose everything. Fun flashing lights too.


That being said, losing money in a brokerage account is a lot more tax efficient than losing money at the casino. So you got that going for you.
ourbrooks
Posts: 1575
Joined: Fri Nov 13, 2009 3:56 pm

Re: Oil ETF?

Post by ourbrooks »

Well, if you want to take on more risk, why just do it with wimpy things like sector ETFs?

If you're really serious about investing in oil, why not buy into a joint venture drilling an oil well? If the well is successful, for your one time investment, you own a share in all of the oil that comes out of that well, even if they produce from it for twenty more years. You can buy into some JVs for as little as $50,000 and up to 75% of that may be deductible in the first year. They won't give you free drinks and rooms, like a casino, but they'll let you visit the well site and you'll be entirely legit when you mention "my oil well" at social events.
patrick
Posts: 2589
Joined: Fri Sep 04, 2009 3:39 am
Location: Mega-City One

Re: Oil ETF?

Post by patrick »

I don't expect OIL to be much, if any, better than USO. OIL tracks a futures index and thus should be expected to perform similarly to the USO fund which also uses futures, and from the historical results it seems that OIL has indeed performed very similarly to USO since inception back in 2006. Note that OIL is an ETN, not an ETF, which means it is simply debt of the issuer. This might give you a tax advantage if you use OIL, but it means that OIL suffers credit risk
airahcaz
Posts: 1525
Joined: Sat Oct 31, 2009 3:37 pm

Re: Oil ETF?

Post by airahcaz »

toto238 wrote:UWTI and DWTI. Triple leverage. Long and short. Go big or go home.

Actually, don't invest in Oil ETFs at all. They're really a poor investment.

I prefer to gamble at the casino. They serve you drinks and comp your room after you lose everything. Fun flashing lights too.


That being said, losing money in a brokerage account is a lot more tax efficient than losing money at the casino. So you got that going for you.
Seems UWTI and DWTI will be delisted.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course. (Plagiarized, but worth stealing)
User avatar
oldcomputerguy
Moderator
Posts: 17878
Joined: Sun Nov 22, 2015 5:50 am
Location: Tennessee

Re: Oil ETF?

Post by oldcomputerguy »

I had a few bucks of "play money" that I wanted to put into something. I went looking through Fidelity's ETF screener, selected for lowest per-share cost, lowest ER, just looking for the cheapest thing I could buy. Turned out FENY came to the top, so I bought a few shares. It's sitting there gathering dust.
There is only one success - to be able to spend your life in your own way. (Christopher Morley)
User avatar
nisiprius
Advisory Board
Posts: 52105
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Oil ETF?

Post by nisiprius »

mojorisin:

a) What happened to the price of oil, 2009-mid 2014?

source
Image

b) What happened to the price of the USO ETF, 2009-mid 2014?

Source

Image

The price of oil increased by 150%. The price of the USO ETF stayed about the same. People who invested in USO in late 2009, believing that the price of oil was about to drive, were right--it did rise--but it didn't do them any good.

If you don't understand why this happened, you should make sure that you do understand before you invest in any "oil ETFS."

If you understand perfectly why this happened, explain to me why it won't happen again.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
lack_ey
Posts: 6701
Joined: Wed Nov 19, 2014 10:55 pm

Re: Oil ETF?

Post by lack_ey »

psst this thread is old and was just recently bumped by this post:
airahcaz wrote:
toto238 wrote:UWTI and DWTI. Triple leverage. Long and short. Go big or go home.

Actually, don't invest in Oil ETFs at all. They're really a poor investment.

I prefer to gamble at the casino. They serve you drinks and comp your room after you lose everything. Fun flashing lights too.


That being said, losing money in a brokerage account is a lot more tax efficient than losing money at the casino. So you got that going for you.
Seems UWTI and DWTI will be delisted.
One article here:
http://www.etf.com/sections/features-an ... r-oil-etns
That's what makes last week's news that Credit Suisse intends to delist two of its oil ETNs so surprising. The VelocityShares 3x Long Crude Oil ETN (UWTI) and the VelocityShares 3x Inverse Crude Oil ETN (DWTI) are anything but unpopular. As of Friday, the two had assets of $1.6 billion and $222 million, respectively―amounts that would make many issuers envious.

“It’s completely unusual," said Eric Balchunas, senior ETF analyst for Bloomberg. "UWTI is the first ETF or ETN with over $1 billion in assets to close.”
The real news is that somebody is delisting an ETP (well, it's a specialty and very risky ETN here and not an ETF, so this may not be quite as meaningful) with over $1 billion AUM. Some people here invest in ETFs with AUM well under $1 billion and that amount is generally considered "safe" in the sense of not at real risk of closure.
toto238
Posts: 1914
Joined: Wed Feb 05, 2014 1:39 am

Re: Oil ETF?

Post by toto238 »

lack_ey wrote:psst this thread is old and was just recently bumped by this post:
airahcaz wrote:
toto238 wrote:UWTI and DWTI. Triple leverage. Long and short. Go big or go home.

Actually, don't invest in Oil ETFs at all. They're really a poor investment.

I prefer to gamble at the casino. They serve you drinks and comp your room after you lose everything. Fun flashing lights too.


That being said, losing money in a brokerage account is a lot more tax efficient than losing money at the casino. So you got that going for you.
Seems UWTI and DWTI will be delisted.
One article here:
http://www.etf.com/sections/features-an ... r-oil-etns
That's what makes last week's news that Credit Suisse intends to delist two of its oil ETNs so surprising. The VelocityShares 3x Long Crude Oil ETN (UWTI) and the VelocityShares 3x Inverse Crude Oil ETN (DWTI) are anything but unpopular. As of Friday, the two had assets of $1.6 billion and $222 million, respectively―amounts that would make many issuers envious.

“It’s completely unusual," said Eric Balchunas, senior ETF analyst for Bloomberg. "UWTI is the first ETF or ETN with over $1 billion in assets to close.”
The real news is that somebody is delisting an ETP (well, it's a specialty and very risky ETN here and not an ETF, so this may not be quite as meaningful) with over $1 billion AUM. Some people here invest in ETFs with AUM well under $1 billion and that amount is generally considered "safe" in the sense of not at real risk of closure.
I agree it is surprising to me that they are being delisted. I somehow doubt gamblers will be at a loss for other things to "invest" in though.
Post Reply