MV Oil Trust (MVO)

[Investorman]

First, MVO isn't a "fund." Its life is finite but the current payout depends primarily on the price of oil. Depending on your view of future oil prices it isn't particulary risky any more than any other stock is.

Most "funds" of any kind are usually crappy investments. They are designed to make fund managers wealthy not the shareholders. Their only saving grace is that they spread risk over a number of companies but that usually results in poor returns on your investment money.

As far as MVO is concerned, I will have earned my entire original investment back in dividends in about another 18 months. At that point the stock price will be pure profit.

If the price of oil drops drastically then the dividend for oil trusts like MVO will not be sustainable but that is what the investment is in. I think that in the very short term oil might fall to $70 a barrel but in the next couple of years it is likely to go up to around $100 a barrel. I recognize the risk and it is an acceptable one for the return I expect to get.