| |
|
|
|
Energy Stocks Are Up 58% This Year. Your Index Fund Barely Owns Them.
The best-performing corner of the stock market in 2026 is the one most index investors hardly own. The largest energy-stock fund has returned about 58% this year. SPY, the oldest fund that tracks the S&P 500, has returned about 12%. Energy now makes up less than 4% of that index.
|
|
|
So the real question is not whether oil has run. It is how much of it you own, and whether buying oil stocks is the only way in. Oil has swung hard in both directions this year, with sharp drops inside a big climb. Swings that size can be traded without owning a single share of an oil company.
Do You Own Oil Stocks? (Read This Either Way) .jpg)
If you do, there’s something you urgently need to see. If you don’t, there’s an even better way to profit from oil, one that has nothing to do with stocks. Either way, a former hedge fund manager is about to change how you see the oil markets. See This Now |
|
|
The Scoreboard
|
• Energy: The Energy Select Sector SPDR fund closed at a record on Friday, up about 58% this year with dividends.
• S&P 500: SPY, the oldest S&P 500 fund, is up about 12% this year with dividends.
• Your share: Energy is less than 4% of the S&P 500 by recent estimates. In June 2008, it was more than 16%.
• Earnings: Higher estimates for energy companies were a major reason S&P 500 profit growth rose this month, per FactSet.
• Price tag: In September, energy stocks traded at about 14 times expected earnings, against nearly 20 for the S&P 500.
• Next: Exxon Mobil and Chevron report results on Friday, October 30.
|
|
|
Details
|
The Winner You Own Almost None Of
Energy stocks closed at a record on Friday. The reason is the war that began on February 28. Brent crude is up more than 50% since then, and on Friday it reached its highest price since late April. Oil companies sell that oil, and their profits have followed the price.
Higher prices have turned oil producers into cash machines this year. For anyone living off a portfolio, the appeal is not only the price gain. A business that keeps paying dividends while oil is high, and still has a job to do when AI needs more power, can play several roles at once: income, growth and a hedge against a weaker dollar.
3 Investments in 1 Stock: Income, AI Growth, Inflation Shield 
Picture a stock that pays you like a fat pension... Rides the AI boom like a tech stock... And guards your savings from the falling dollar like gold. Retirees usually need 3 separate investments for that. There’s one stock that does all three at once. CNBC’s “The Prophet” says it’s the single most important retirement stock in America right now. >>> Get the name and ticker, completely free. This ad is sent on behalf of Stansberry Research, 1125 N Charles St, Baltimore, MD 21201. |
Wall Street does not trust the boom. Look at the price tag. In September, DataTrek Research noted that energy stocks traded at about 14 times expected earnings. That means paying about $14 for each $1 of yearly profit. The S&P 500 cost nearly $20. Oil futures for late 2027 were priced near $72 a barrel, far below where oil traded then. In plain terms, investors pay less for energy profits because they expect those profits to shrink once the war ends.
Why you own so little. An index fund holds each company in proportion to its stock market value. In June 2008, as oil neared its all-time high, energy made up more than 16% of the S&P 500. After years of cheap oil and booming technology stocks, it is now less than 4%. Exxon Mobil, the biggest energy company, is only about 1% of the index. So energy’s 58% gain added only roughly two points to an S&P 500 fund this year.
That is the other side of an index built on stock market value. Most of your money now rides on technology, and much of it on AI. Last week showed how fast that can wobble once investors start questioning the spending, and few people could tip that balance faster than Elon Musk.
The profits are already showing. As of Friday, 24% of S&P 500 companies had reported third-quarter results. Profit growth for the quarter, counting both reported and expected results, stood at 29.5%, per FactSet. Higher estimates for energy companies were a major reason that number rose this month.
Energy has a second buyer, too: artificial intelligence. Every data center needs electricity around the clock, and much of America’s electricity comes from natural gas. That demand does not depend on how long the war lasts.
That is a different kind of energy bet. It does not depend on where oil trades next month. It depends on how fast new power plants can be readied for data centers, and that takes years, so the value sits with whoever gets the projects ready first.
Data centers run AI around the clock and pay for power they can count on. You can own a piece of American PowerGen, which develops natural gas power projects in Texas, from $1,000. Review the offering terms. Securities are being offered pursuant to Regulation Crowdfunding through DealMaker Securities LLC. Please review the offering materials, including the Form C, before investing at invest.americanpowergen.com. |
Where that leaves you. If you own only an S&P 500 fund, you own very little energy. For most of the past decade, that was a good thing. This year it meant missing most of the market’s best run. Adding energy now is a bet that oil stays higher than the futures market expects. It also works as insurance. Energy tends to rise when war and inflation hurt the rest of a portfolio. That is what happened this year. In thirty years of advising clients, I learned one thing about fear. Owning a little of what you fear makes the bad weeks easier to sit through.
Brazil votes in a presidential runoff today. The Fed meets on Tuesday and Wednesday. Exxon Mobil and Chevron report on Friday. The midterms follow on November 3.
An index fund owns the most of whatever already won. This year, the winner was the part it owned least.
|
|
Harold Winston
Thirty years advising individual investors. Now reads markets for a living.
Stay grounded while markets move fast.
|
|
|
|
0 التعليقات:
إرسال تعليق