Long term outlook for energy

[Beststash]

What are your opinions of the long term outlook for energy?? With the oil situation, limited supply,  and the unrest in the Middle East - why would it not be prudent to buy a energy sector fund?? I have PCRIX and don,t quite understand everything I know about it and it's recent moves

 

[JPatrick]

What are your opinions of the long term outlook for energy?? With the oil situation, limited supply,  and the unrest in the Middle East - why would it not be prudent to buy a energy sector fund?? I have PCRIX and don,t quite understand everything I know about it and it's recent moves

Stash, I don't consider PCRIX to be a energy sector fund.  It leans towards energy, but is also full of t-bills to hedge the commodities.  Looking at the comparison to peers--well it doesn't look good.
A more pure energy sector fund would be Fido's FSENX and FSESX.  ETF's include XLE and OIH.  Long term for oil?  The easy and common answer is that it is a no-brainer destined to continue going up as in supply/demand.  Could be, but it likely will be a rocky road.  If you have a long term horizon I'd buy one or both of the Fido funds.  $2500 each minimum.  From there I'd add on the dips.  It isn't hard to spot the dips.  Just fill up your car or pay your heating bill.

Below is a chart showing performances of the Fido funds vs the S&P500 for the last 5 years. The green line is the 500.

Now if you go out even further you get a slightly different picture, but the bottom line is that even during the "boring" energy years (as in prior to the last 2 years) the funds have been a decent investment, especially the service sector.

 

[JPatrick]

I meant to give you a chart showing your fund, the Fido energy service fund and the S&P 500.

It is somewhat apples to oranges, but it shows what a typical energy equity fund does to PCRIX. The reason it is apples to oranges is because it shows NAV growth without regard to dividends. You no doubt have a pocket full of div dollars.

 

[lazyday]

That chart would look different if it included reinvested dividends.

Check out this one: http://quicktake.morningstar.com/Fund/TotalReturns.asp?Country=USA&Symbol=PCRIX&fdtab=returns

 

[BUM]

What are your opinions of the long term outlook for energy?? With the oil situation, limited supply, and the unrest in the Middle East - why would it not be prudent to buy a energy sector fund?? I have PCRIX and don,t quite understand everything I know about it and it's recent moves

Commodities have been hammered over the past week or so. That coupled with the fund's federal compliance issues (IMO) have put pressure on the fund. A good time for me to DCA.

 

[Rustic23]

Long Term? How Long? There is plenty of sources of energy, the question is ‘At what price’. Coal gasification, hydrogen, fission, fusion, solar, wind, and ways we may not even know about. Fusion I find of interest. We know that is how the sun does it, but a report I read recently said that technology is 500 years off. I thought, how can that be.

So if long term is less than (fill in the blank) years off, maybe energy is the place to be, or was it the place to be.

 

[Spanky]

Energy will be needed for economic business expansion, though the return will be volitile. If you believe that the expansion continues indefinitely, tilt more toward energy and materials. It's probably better to invest in a commodity fund as opposed to a pure energy fund as some commodities may perform better than others under various business cycles.

 

[Marshac]

We know that is how the sun does it, but a report I read recently said that technology is 500 years off. I thought, how can that be.

When we (the US) don't really fund serious research into the field, and the notion of anything other than "hot" fusion is regarded as "bunk" science by the scientific community, I think 500 years is optimistic. Fortunately however, the US isn't the only country on this plant (contrary to popular belief), and the new ITER research reactor should go a long way towards increasing our knowledge of sustainable fusion- once it's completed in 10 years. IMO, until we figure out Fusion, Fission is the only source that is technically feasible AND can supply enough inexpensive energy. Believe it or not, under normal operation, a nuclear power plants release less radiation into the environment than a coal fired plant.

 

[HFWR]

One word (ok, two): Superconducting Supercollider...