Just look at what's happening in the energy markets right now ...
Iran is cutting off shipments to some of its biggest European customers — just out of spite for the nuclear technology dispute. Who will get dragged into this squabble next?
Furthermore — and I bet you've noticed — it's costing more to top off your car's gas tank these days. We're almost back to the 2008 "super-spike" gasoline prices in some parts of the U.S.
The headlines simply prove Sean's point: Natural gas is set to be the next big energy boom. It's much more efficient than crude oil in many cases ... and the U.S. has its own ample supply. We don't have to depend on imports.
|Relying on imported energy is getting riskier.|
Why natural gas now and not a year ago? Because the situation has changed. Natural gas is relatively cheap, and the technology to produce more of it is developing quickly. The number of investor-friendly ways to get involved is exploding, too. You'll be hearing about some great profit plays from Sean.
For my part, I'm watching some natural gas-related ETFs. And I see opportunities in three specific areas ...
Opportunity #1: Natural Gas ETFs and ETNs
Not so long ago, the only way for an individual investor to get direct exposure to natural gas prices was through the futures market. This is complex and impractical for most people — even without the massive leverage.
As with so many other sectors, the ETF revolution brought a big change. Now several ETFs and exchange-traded notes allow you to participate in the global energy markets much more easily.
These have some drawbacks, though. Many commodity ETFs and ETNs still have very low volume. Some are even on my Deathwatch list.
Another problem is that futures markets, by their nature, are hard to track with any precision over the long-term. To learn why, see "What's All This Talk About Oil Futures and Contango?" The same applies for natural gas.
Yet another challenge: Complex instruments like these draw a lot of legal scrutiny, especially when they are new and unproven.Regulators have occasionally created roadblocks for commodity-based energy ETFs and ETNs.
Nevertheless, if you want to capitalize on quick moves in natural gas prices, take a look at these tickers:
- iPath DJ-UBS Natural Gas Total Return ETN (GAZ)
- iPath Seasonal Natural Gas ETN (DCNG)
- Teucrium Natural Gas Fund (NAGS)
- UBS ETRACS Natural Gas Futures Contango ETN (GASZ)
- United States 12 Month Natural Gas Fund (UNL)
- United States Natural Gas Fund LP (UNG)
- ProShares Ultra DJ-UBS Natural Gas (BOIL)
- ProShares UltraShort DJ-UBS Natural Gas (KOLD)
Opportunity #2: Pipeline Profits
|Natural gas travels by pipe.|
As you know, natural gas doesn't just appear out of nowhere. It's a useless resource if it can't get from the ground to your furnace.
Gas pipelines solve this problem nicely. They're a big business — and if Sean is right they're going to get bigger!
For tax reasons, energy pipelines are typically owned by "master limited partnerships," or MLPs. As I wrote almost two years ago, you can build a quick, diversified MLP portfolio with ETFs and ETNs. Individual MLP securities also have great potential if you pick the right one at the right time. I can't wait to see Sean's picks in this niche.
Opportunity #3: Small Cap Energy ETFs
Sean is very keen on small-cap natural gas stocks — and rightly so. The potential profits are enormous. But if you prefer a more diversified approach, ETFs may be a great answer.
Until very recently it was hard to find energy sector ETFs that weren't dominated by multinational conglomerates like ExxonMobil (XOM). Several new entrants make it easier to get involved in smaller energy stocks:
|Natural gas comes from surprising places.|
- Market Vectors Unconventional Oil & Gas ETF (FRAK)
- PowerShares S&P Small Cap Energy Portfolio (PSCE)
- Jefferies TR/J CRB Wildcatters Exploration & Production Equity ETF (WCAT)
As you can see, the biggest and best-known ETF players are moving quickly to get involved in natural gas. That should tell you something: This is a niche with huge potential!
I think natural gas ETFs will offer great opportunities over the next year or two. Do your research, get some help and good luck!
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Current Headlines - Finance
After market spasm, Wall Street looks past Brexit
By Noel Randewich SAN FRANCISCO (Reuters) - A week-long convulsion in U.S. stocks induced by Britain's vote to leave the European Union has left some on Wall Street feeling a little bit better thanks to stronger expectations of prolonged low interest rates. The result of the June 23 referendum has created a bounty of uncertainty about the future of the United Kingdom, Europe and the global economy.
Wall Street ends higher for fourth straight day
The S&P 500 tallied its best week since November, staging a strong rebound from its worst two-day decline in 10 months sparked by Britain's shock vote last week to leave the European Union. "Clearly, people have assessed that either, one, it's not a big deal, or, two, it’s not going to happen at all, and they’re positioning according to those views," said Walter Todd, chief investment officer at Greenwood Capital in Greenwood, South Carolina. The Dow Jones industrial average rose 19.38 points, or 0.11 percent, to 17,949.37, the S&P 500 gained 4.09 points, or 0.19 percent, to 2,102.95 and the Nasdaq Composite added 19.90 points, or 0.41 percent, to 4,862.57.
Stock market majors launch electronic book mechanism
BSE and the National Stock Exchange of India (NSE) -- on Friday launched the electronic book mechanism (EBM) for issuance of debt securities on private placement. The BSE launched its "BSE BOND" for issuance of debt securities on private placement basis. "The first placement of bond through BSE BOND was raised by HDB Financial Services Limited with an issue size of Rs 100 crore, which was fully subscribed," the BSE said in a statement.
Forget Brexit: The Real Reasons Stock Market Bears Are About to Strike Back
This market, pumped up on central bank stimulus, refuses to stay down. Don't take my word for it: Aggressive rallies in government bonds and precious metals belie the confidence in equities. Caution is still warranted as stocks have merely returned to the upper end of an epic three-year consolidation range.
Zimbabwe's stock market main index falls in H1, further loses seen
The Zimbabwe Stock Exchange's (ZSE) main index shed 13.7 percent and market capitalisation fell by $300 million during the first six months of the year, official data showed on Friday, as fewer foreign investors bought shares and the economy slowed down. The ZSE, which had been propelled by foreign buyers looking for bargains since Zimbabwe adopted the U.S. dollar in 2009, has been on a slide since the end of 2014 as the economy slumped. Market capitalisation fell to $2.8 billion at the end of June from $3.1 billion at the beginning of the year.
Obama uses Hiroshima visit as opportunity to urge no nukes
HIROSHIMA, Japan (AP) — With an unflinching look back at a painful history, President Barack Obama stood on the hallowed ground of Hiroshima on Friday and declared it a fitting place to summon people everywhere to embrace the vision of a world without nuclear weapons.
Senate sleuths focus on ex-State Department aide in Clinton email ‘cover-up’
As Hillary Clinton seeks to rebound from a highly critical report from the State Department’s inspector general, Senate investigators and a conservative group are zeroing in on newly revealed evidence about the activities of a now retired State Department computer specialist in orchestrating what they charge was a “cover-up” of the former secretary of state’s email practices. The role of John Bentel, whose identity as a key figure in the email probes was first reported by Yahoo News on Wednesday, is expected to be one focus of questioning today when Clinton’s former chief of staff, Cheryl Mills, is deposed in a lawsuit brought by Judicial Watch over the State Department’s handling of Freedom of Information Act requests relating to Clinton’s emails, according to a source close to the case.
G7 told to act on antibiotics as dreaded superbug hits U.S.
By Kylie MacLellan and Ben Hirschler ISE-SHIMA, Japan/LONDON (Reuters) - Britain told the G7 industrial powers on Friday to do more to fight killer superbugs as the United States reported the first case in the country of a patient with bacteria resistant to a last-resort antibiotic. U.S. scientists said the infection in a 49-year-old Pennsylvania woman "heralds the emergence of truly pan-drug resistant bacteria" because it could not be controlled even by colistin, an antibiotic reserved for "nightmare" bugs. In Japan, British Prime Minister David Cameron said leading countries needed to tackle resistance by reducing the use of antibiotics and rewarding drug companies for developing new medicines.
Statue of Liberty, other world sites threatened by climate change, says U.N.
The Statue of Liberty is seen in New York harbor. Climate change might dampen Lady Liberty’s glow, according to experts. The United Nations released a report Thursday saying 31 natural and cultural World Heritage sites in 29 countries are vulnerable to the effects of climate change: rising temperatures, rising sea levels, intensifying storms, longer droughts and so on.
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