Financialstocks

Terrorist attacks threaten the security of nations and create an atmosphere of uncertainty. These threats impact stocks and commodities markets around the world and make investment decisions very difficult, even for the experts.

So what can average investors do? First, they should ask themselves what the likelihood is of a major terrorist attack. Then, they should determine whether their portfolios are hedged sufficiently with oil-related investments that would increase in value should a major terrorist attack disrupt oil production and distribution.

“One of the critical issues we face with oil security is its transportation,” said Roger L. Cory, president of Mammoth Resource Partners Inc., a Kentucky-based oil and gas exploration company. “Our oil transport system is a worldwide network. It’s practically impossible to secure it all and one soft target for terrorists can create significant disruptions.”

Mammoth Resource Partners released a lengthy report detailing the vulnerability of this industry to terrorism. The report warns that the “oil transportation system provides an endless array of possibilities for the terror networks to exploit.”

Oil wells, drilling platforms, loading terminals, ports, tanker ships, storage tanks and refineries are all prime targets. The 200,000 miles of pipeline in the U.S. and the 10,000 miles of pipeline in Saudi Arabia are particularly vulnerable, especially as most of the pipelines are above ground and poorly guarded, according to the report.

Straits and canals around the world also can be terrorist targets. More than 6,000 oil tankers travel through the Bosporus annually, and 80 percent of all Persian Gulf oil – 40 percent of the world’s oil production – travels through the Strait of Hormuz.

The Ras Tanura complex in Saudi Arabia is an example of the precariousness of the situation. According to the Mammoth report, “Experts estimate that a single aircraft flown into the Ras Tanura could disable it indefinitely and create an instant oil price spike of $80 to $100 per barrel.” Current prices are around $60 per barrel.

What does all of this mean for those who want to invest in the oil industry? Investors should be cautious, Cory says. Buying stock in multinational companies may not bring much return because you are investing in a company, not in oil. Since natural resource mutual funds are diversified, their oil holdings may not be sufficient to return a decent profit. With oil futures and options, there is greater risk. Timing is everything; being off in your calculations by just a few days could cost you dearly. And, the professionals know that 80 percent of all options are worthless when they expire.

Oil and gas partnerships – in which investors own a percentage of the resources extracted from the wells they funded – provide a middle path between low- and high-risk investments.

When it comes to investing, many first time investors want to jump right in with both feet. Unfortunately, very few of those investors are successful. Investing in anything requires some degree of skill. It is important to remember that few investments are a sure thing there is the risk of losing your money!

Before you jump right in, it is better to not only find out more about investing and how it all works, but also to determine what your goals are. What do you hope to achieve with your investments? Will you be funding a college education? Buying a home? Retiring? Before you invest a single penny, really think about what you hope to achieve with that investment. Knowing what your goal is will help you make smarter investment decisions along the way!

Too often, people invest money with dreams of becoming rich overnight. This is possible but it is also rare. It is usually a very bad idea to start investing with hopes of becoming rich overnight. It is safer to invest your money in such a way that it will grow slowly over time, and be used for retirement or a childs education. However, if your investment goal is to get rich quick, you should learn as much about high-yield, short term investing as you possibly can before you invest.

You should strongly consider talking to a financial planner before making any investments. Your financial planner can help you determine what type of investing you must do to reach the financial goals that you have set. He or she can give you realistic information as to what kind of returns you can expect and how long it will take to reach your specific goals.

Again, remember that investing requires more than calling a broker and telling them that you want to buy stocks or bonds. It takes a certain amount of research and knowledge about the market if you hope to invest successfully.

When it comes to investing, many first time investors want to jump right in with both feet. Unfortunately, very few of those investors are successful. Investing in anything requires some degree of skill. It is important to remember that few investments are a sure thing there is the risk of losing your money!

Before you jump right in, it is better to not only find out more about investing and how it all works, but also to determine what your goals are. What do you hope to achieve with your investments? Will you be funding a college education? Buying a home? Retiring? Before you invest a single penny, really think about what you hope to achieve with that investment. Knowing what your goal is will help you make smarter investment decisions along the way!

Too often, people invest money with dreams of becoming rich overnight. This is possible but it is also rare. It is usually a very bad idea to start investing with hopes of becoming rich overnight. It is safer to invest your money in such a way that it will grow slowly over time, and be used for retirement or a childs education. However, if your investment goal is to get rich quick, you should learn as much about high-yield, short term investing as you possibly can before you invest.

You should strongly consider talking to a financial planner before making any investments. Your financial planner can help you determine what type of investing you must do to reach the financial goals that you have set. He or she can give you realistic information as to what kind of returns you can expect and how long it will take to reach your specific goals.

Again, remember that investing requires more than calling a broker and telling them that you want to buy stocks or bonds. It takes a certain amount of research and knowledge about the market if you hope to invest successfully.