How Rising Energy How Rising Energy Prices Prices Can Affect Your PortfolioCan Affect Your Portfolio

Common Sense on Complex Common Sense on Complex IssuesIssues

Have you noticed how much it Have you noticed how much it costs to fill up your tank lately?costs to fill up your tank lately?

Whether you have Whether you have a small sports car, a small sports car, an SUV or a big an SUV or a big bus, the rising bus, the rising costs at the pump costs at the pump are felt by all of us.are felt by all of us.

The costs don’t just affect personal The costs don’t just affect personal transportation but in business also.transportation but in business also.

It costs more to fly It costs more to fly in a plane, take a in a plane, take a cab, run a family cab, run a family farm, deliver goods farm, deliver goods and services, etc.and services, etc.

The costs of energy don’t stop at The costs of energy don’t stop at transportation either.transportation either.

Imagine this winter Imagine this winter if your heating bill if your heating bill with natural gas, with natural gas, electric or home electric or home heating oil goes up heating oil goes up substantially. substantially.

Some people want to consider alternative Some people want to consider alternative energy sources like wind power. energy sources like wind power.

Maybe you have Maybe you have thought about thought about buying a fuel buying a fuel efficient car, using efficient car, using public public transportation or transportation or moving to a moving to a warmer climate.warmer climate.

Other people decided they want to Other people decided they want to get even or even ahead!get even or even ahead!

They want to have the energy companies They want to have the energy companies send them a monthly check to pay their send them a monthly check to pay their bills instead of visa versa! How did they bills instead of visa versa! How did they accomplish this? They looked in their accomplish this? They looked in their bank accounts and decided 2%-3% just bank accounts and decided 2%-3% just wasn’t going to do the job they needed wasn’t going to do the job they needed finished! They were willing to take a risk finished! They were willing to take a risk by putting their money in the same by putting their money in the same companies who had the rising energy companies who had the rising energy profits and receiving a monthly/quarterly profits and receiving a monthly/quarterly dividend!dividend!

As an example:As an example: Placing $50,000 at a fixed rate returned Placing $50,000 at a fixed rate returned

$1,000 @2% or $1,500 at 3%. By investing $1,000 @2% or $1,500 at 3%. By investing in a gas pipeline, a propane company, a in a gas pipeline, a propane company, a Royalty trust, that are paying dividends Royalty trust, that are paying dividends currently or between 5% and 10%, which are currently or between 5% and 10%, which are not guaranteed, they could earn more not guaranteed, they could earn more income. The difference in returns could pay income. The difference in returns could pay for gas for a car for a year assuming you fill for gas for a car for a year assuming you fill up the tank weekly at about 50$ per tank, up the tank weekly at about 50$ per tank, That assumes no appreciation on the That assumes no appreciation on the investments at all. investments at all.

You may think you have to have You may think you have to have your eyes examined to believe the your eyes examined to believe the

energy prices!energy prices!

Here are some of the types of companies Here are some of the types of companies that make up a part of the energy market.that make up a part of the energy market.

Utilities (electric, gas, coal fired and Utilities (electric, gas, coal fired and nuclear)nuclear)

Exploration companies that find the Exploration companies that find the energy in the ground or off shoreenergy in the ground or off shore

Companies that transport the energy Companies that transport the energy above or below ground and pipelinesabove or below ground and pipelines

Refineries and storage facilitiesRefineries and storage facilities Companies that make the tools to take out Companies that make the tools to take out

the energy out of the groundthe energy out of the ground Companies that ship oil or energy around Companies that ship oil or energy around

the globethe globe

Here are some of the types of companies Here are some of the types of companies that make up a share of the energy marketthat make up a share of the energy market

Companies that clean up the air and Companies that clean up the air and water from the by products of water from the by products of manufacturing energymanufacturing energy

Companies that manufacture oil rigs Companies that manufacture oil rigs Companies that fly crews on and off oil Companies that fly crews on and off oil

rigsrigs Companies that search for energy Companies that search for energy

globallyglobally Companies that construct energy plantsCompanies that construct energy plants New technologies like wind and solarNew technologies like wind and solar

Are we in the early or late stages of Are we in the early or late stages of the energy cycle?the energy cycle?

Guess that depends on Guess that depends on your point of view, but your point of view, but one thing is clear. one thing is clear. Making decisions that Making decisions that will affect your portfolio will affect your portfolio based on research, based on research, planning and execution planning and execution can make the can make the difference to wondering difference to wondering what happened, what happened, knowing what knowing what happened and making happened and making it happen. it happen.