So you have finally gotten the gist of a balanced portfolio, and realize your best investment strategy is to buy Blue Chip rock solid companies that pay a 4% dividend, or no dividend at all. But you want more... So there are 2 things you need to do, and this is straight out of the Warren Buffet hand book. 1. Have cash on hand 2. Look for opportunities. Oh, so easy is it... NOT...
One opportunity that I realized a few years ago, Oil. Not gas, not pipelines, not oil rigs... Oil. Bulk oil production. The world needs oil, and will for another 200 years, its not going away any time soon, and its getting harder to find, and more expensive to produce, so long term, the future is good for crude. Combine that with the fact that crude oil is the most manipulated commodity on the planet, at the drop of a hat, OPEC can pump the price, just by turning of the spigot for a few months, and that is exactly what happened in 1974 during the so called "Oil Crisis". There never was one, it was all fake... we had a shit load of oil to produce, but it was throttled and nobody went to jail for stock manipulation.
The investment I chose was close to home ERF.TO, but there are many. In 2016, the bottom hit, and that's when I got in, little did I know another bottom would come, in 2020, and be even lower... but I held tight. I bought more of the same. At one point oil futures were negative? I still don't get that, but relatively speaking, oil was at $18 a barrel, and ERF.TO was selling for $2 a share, I jumped on it and doubled my shares. If I had the foresight, I would have quadrupled my purchase, but I played it safe, as I have been wrong before. As oil peaked to 105/brl i started selling into the bull, the opposite of what most were doing and so far have sold 400 shares. With the last manipulated boost coming... we will see, but I have another sell point at 23/share... and I believe it will go higher...
Now, there is no guarantee that this will happen, but the point here is, recognizing opportunity is how you can maximize your return on investment to more than 7% compound.
How much are we speculating with? Not much, less than 5% of my investment portfolio, but enough to make it worth my time. I call this "Educated speculation" playing a high probability curve, as apposed to just dumping money into Tech, and hoping for the best. More on that later.
There are many relatively safe ways to boost your returns, which we will explore in the next couple of chapters, but let see how this one plays out...
Comments