Learning How to Invest in Oil Can Build Long Term Portfolio Diversity

[Posted on October 16th, 2013 by Michael L. F. Slavin]

When investing, it’s important to diversify. Long-term investors appreciate diversification because it prevents a total loss if one sector of the market should suffer. Here are just a few of the benefits of investing in oil and gas and the importance of learning how to invest in oil in order to diversify your portfolio.

High Demands make Returns Attractive

While solar power is growing in popularity, it’s not poised to eclipse oil and gas anytime soon. The demand for oil and gas is growing in the United States and around the globe. As a result of limited supply and growing demand, the potential for large returns on oil investments is high. It can be used as a hedge against the stock market. The trends for returns on oil investments have steadily moved up over the years, and it’s expected to continue growing. Learning how to invest in oil can assist you in taking advantage of the upward growth.

Tax Advantages

There are key tax advantages associated with oil and gas investments. The initial investment in this industry is fully tax deductible, and that helps you reduce your gross adjusted income on the federal taxes. Further, 15 percent of the subsequent income is not subject to taxes, so investors can keep more of the money they’ve earned. The tax write-off on the investment is available even for new well exploration that is not successful.

Regular Income

In addition to diversifying a portfolio, oil and gas also provide customers with a monthly income. This helps people enjoy their standard of living without having to dip into their principal savings balances. They can take the monthly payments and use them for their own purposes, or they can have the payments reinvested into the industry to boost future earnings and expand personal net worth. The residual income may continue for many years after the initial investment was made, and that also makes this an attractive investment.

Creates Growth Opportunities

Currently, most of the gas and oil used in the United States comes from overseas. However, there is a wealth of oil sitting under American soil. As these resources are tapped and developed, it creates lucrative domestic jobs. It also serves to reduce the dependence on foreign oil sources, and that’s great news for the United States. The United States government recognizes the importance of developing stable, domestic energy sources, and that’s why they offer such attractive tax advantages for investors.

Investing with U.S. Emerald Energy

It’s important to work with the right company. While no agency can guarantee success, it’s is vital to work with teams that carefully pick wells that are more likely to be lucrative. The company should also be committed to drilling safe wells. U.S. Emerald Energy can provide investors with over 20 years of experience in the industry and latest technology used to procure the best wells.

There are many benefits to investing in oil and gas, so it’s an excellent choice for people who are ready to diversify their portfolios. U.S. Emerald Energy will choose the wells that can provide investors with monthly income for years to come.

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