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  #1  
Old 07-05-2005, 05:27 PM
fluff fluff is offline
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Default Too late to buy energy ETFs?

Hi,

I'm building an ETF portfolio which is about 60% stock (US and foreign), 20% REIT, 10% Bonds, 10% Material ETF (IYM). I'm 29, and the money is in there for the long term (5+ years min).

For this month I was thinking of adding IYE (energy/oil ETF, largest holdings are XOM and CVX).

Am I too late to join the bandwagon?
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  #2  
Old 07-05-2005, 08:19 PM
StickyWicket StickyWicket is offline
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Default Re: Too late to buy energy ETFs?

With the history on this particular ETF, it's currently trading over its 52-week high, and looking at performance, you're buying it over it's resistance level (the level at which a stock stops increasing). With a chart pattern like this, I'd tend to think it's overvalued and due for a correction. All of the energy ETF's are behaving this way currently, so if you MUST add an energy ETF to your portfolio NOW, and you're going to have to buy overvalued securities, look at XLU, where your dollars will go further...

All of the Energy ETF's (XLE, VDE, IXC, IGE, IYE) are charting the same, so get some bang for your buck out of the less expensive shares.

JMHO.

Sticky [img]/images/graemlins/heart.gif[/img]
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  #3  
Old 07-05-2005, 08:55 PM
AceHigh AceHigh is offline
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Default Re: Too late to buy energy ETFs?

[ QUOTE ]
Am I too late to join the bandwagon?

[/ QUOTE ]

Probably.
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  #4  
Old 07-05-2005, 10:20 PM
Dan Mezick Dan Mezick is offline
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Default Re: Too late to buy energy ETFs?

[ QUOTE ]
Am I too late to join the bandwagon?

[/ QUOTE ]

Not according to today's price action.

I see IYE is in a raging uptrend and recently made a new all-time high in mid-June.
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  #5  
Old 07-05-2005, 11:23 PM
wildwood wildwood is offline
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Default Re: Too late to buy energy ETFs?

Dollar cost averaging into investments that you are going to hold for years is a reasonable way to avoid the anxiety from any short term price corrections. fwiw
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  #6  
Old 07-06-2005, 12:18 AM
natedogg natedogg is offline
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Default Re: Too late to buy energy ETFs?

Energy ETFs tend to focus entirely on oil and gas, and it's always worth thinking twice if you're buying anything at an all-time high (although in terms of real dollars oil is not at an alltime high).

Despite Goldman Sachs' recent prediction of $100/bb by end of year, there some indications that oil won't go a lot higher.

http://www.businessweek.com/magazine...2038_mz011.htm

An interesting contrarian take on supply.

natedogg
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  #7  
Old 07-06-2005, 02:32 AM
laserboy laserboy is offline
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Default Re: Too late to buy energy ETFs?

For what it's worth, most stock analysts are still using forward projections of $40/barrel or less for their earnings estimates and valuations. With oil prices hovering significantly above $40, their future earnings look much more attractive than current estimates seem to indicate. My personal belief is that the days of $40 oil are behind us.

And even with $40 oil, many of these oil companies are still valued at less than 10X cashflow. Very few other sectors offer this kind of valuation.
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  #8  
Old 07-06-2005, 03:36 AM
OrangeCat OrangeCat is offline
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Default Re: Too late to buy energy ETFs?

Don't forget OIH. That is doing great too.

I think laserboy has it right. If $50 oil becomes the accepted norm, many oil related companies are actually undervalued.
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  #9  
Old 07-06-2005, 04:59 PM
NoTalent NoTalent is offline
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Default Re: Too late to buy energy ETFs?

This is just my opinion, fwiw:

Energy can't go anywhere but up. I don't know how fast or how soon--but you can't expect it to do anything else. With China and India becoming more 'western' it's just a matter of time.

Good advice about dollar cost averaging.
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  #10  
Old 07-06-2005, 06:16 PM
gvibes gvibes is offline
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Default Re: Too late to buy energy ETFs?

First, 5 years isn't long term.

Second, I would increase your bond allocation.
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