AI
Wednesday, March 04, 2009 11:42:53 AM
A few questions. I started buying OIL at $21 and below $40 a barrel. I thought I understood contango but I clearly didn't know how it would play out. Now oil is @ $40 a barrel and OIL is below 17. If the price of oil continues to go up, can I expect OIL to follow? And is OIL good to hold here in your opinion? I plan to AIM sector funds so should I trade OIL for IYE and own the companies instead? Surely would appreciate your feedback.
Hi, Cindy,
Clearly there is some correlation between the price of crude and this OIL play. You should note that this is an ETN rather than an ETF which is a slightly different beastie than you might think it is. See: http://stockweb.blogspot.com/2008/05/difference-between-etf-and-etn.html
Also I remain very excited about AIM but I have had some bumps in choosing ETF's. I am planning to end up holding Global Telecom IXP, Utilities IDU, Tech IYW, IBB, Real Estate IYR, Steel SLX and Commodities GSG. I rethought XLF and am replacing it with KRE. Any suggestions?
Given the current state of the market, I'd phase in to the various ETF's rather than starting out buying the whole lot at once. Keeping cash reserve is an important thing to do right now. We may be near the bottom. On the other hand, Lichello noted that today's floor is tomorrow's ceiling. One needs to balance the excitement with patience. A good analogy is fishing - let the market come to you rather than chase after it.
To answer your question on what do do near a bottom, My savings and dividends afford a stream of cash that I use to buy on the bottom using a fixed ratio of cash to amount invested. That way I don't run out of cash and having more come in, using a ratio relationship keeps me from getting too cash heavy either.The one group of richest dividend paying funds has a near obscene 34.98% dividend yield right now. I'll believe it when I see the money. Given the pittance they're paying on the cash right now if inflation kicks in it's not even holding value. Or barely so.
Some more ideas for you. Keep the questions coming.
Best,
AIMster
Hi, Cindy,
Clearly there is some correlation between the price of crude and this OIL play. You should note that this is an ETN rather than an ETF which is a slightly different beastie than you might think it is. See: http://stockweb.blogspot.com/2008/05/difference-between-etf-and-etn.html
Also I remain very excited about AIM but I have had some bumps in choosing ETF's. I am planning to end up holding Global Telecom IXP, Utilities IDU, Tech IYW, IBB, Real Estate IYR, Steel SLX and Commodities GSG. I rethought XLF and am replacing it with KRE. Any suggestions?
Given the current state of the market, I'd phase in to the various ETF's rather than starting out buying the whole lot at once. Keeping cash reserve is an important thing to do right now. We may be near the bottom. On the other hand, Lichello noted that today's floor is tomorrow's ceiling. One needs to balance the excitement with patience. A good analogy is fishing - let the market come to you rather than chase after it.
To answer your question on what do do near a bottom, My savings and dividends afford a stream of cash that I use to buy on the bottom using a fixed ratio of cash to amount invested. That way I don't run out of cash and having more come in, using a ratio relationship keeps me from getting too cash heavy either.The one group of richest dividend paying funds has a near obscene 34.98% dividend yield right now. I'll believe it when I see the money. Given the pittance they're paying on the cash right now if inflation kicks in it's not even holding value. Or barely so.
Some more ideas for you. Keep the questions coming.
Best,
AIMster
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