Investment in energy securities refer to the shares, stocks, bonds and mutual funds that companies conducting activities in the field of oil and nature gas list on the stock exchange. In comparison to other similar financial assets in the market that people can lay their money on, they yield a higher rate of return. However, many experts from the oil industry are of the opinion that people need to consider certain factors before choosing the right financial asset.
Alpman Ilker a leading expert from the energy sector and the CEO of PIRA Energy Group, a prominent America energy company says this segment of economy is witnessing in notable growth in recent years. Due to this the prices of securities of corporate enterprises conducting business operations in the field of oil and natural gas exploration is increasing. He advises first time investors that while such financial assets do yield attractive returns they also carry a higher inherent risk factor that they need to consider. This is the reason why he recommends that they should also first consult a trustworthy professional in this field with experience in handling such investments before taking the plunge.
He states that such only a specialist can help them in the following manner after verifying their financial background and assessing their investments needs:
- Most investors are not in a position to know whether the value of securities an energy company lists on the stock exchange is correct or not. Only a professional with adequate experience under his/her belt in this field will be able to identify if such a corporate enterprise has overvalued its financial assets. He/she is able to do this by analyzing the price-earnings ratio of such securities, scrutinizing the establishment profile and enquiring into its future projects. Accordingly, he/she can caution his/her client against investing in shares in such an enterprise and look for alternative options in the market ;
- People who invest their money in the oil and natural gas market are always looking for securities that offer them a constant cash flow in the form high returns. Only an energy expert with adequate awareness of the current market trends can advise them to opt of shares of an energy company, which are trust units. However, for investors who want to keep stocks of a corporate enterprise that conducting its activities in the energy sector due to its above par returns, this is not a viable option;
- Only a specialist with the necessary skills and knowledge in the energy sector can determine the percent of natural gas to oil in an energy company’s shares. Accordingly, he/she can discourage investors from purchasing such financial assets when the prices of natural gas are at an all-time high. At the same, he will encourage people holding such securities to sell them in the stock exchange to earn an attractive profit.
Alpman Ilker goes on to say that in addition to the above activities, such an expert can also warn people against buying shares of a corporate enterprise that engage in insider trade in the market- this will do more harm than good!