[thekid]

I bought in a bit (about 5K$) into energy stock based mutual funds. The return was fantastic last year (when I bought) -in the 40% range- and had been for previous years. The last two months or so have seen the funds drop by about 25%. I'm keeping them for the long term so haven't sold to lock in previous gains. I think this is key. Short term could see quite a further drop as reserves seem to be high and demand low (which can quickly get much lower if there is a recession). There is a security valve of sorts in the oil market however and that is OPEC. They lower (or threaten to lower) output -as they are now doing- if prices fall too much. This is probably the only reason why the stock hasn't fallen a lot more so far as the the prices seem to still be quite a bit inflated based on simple supply and demand. Anyway, my point is that short term the investment would be very volatile and dangerous (market seems to want to bring it down while it is artificially been kept from diving too much by the cartel). This could change and the price of oil could seriously correct itself. Long term, I think it is a good buy. There is the risk of new technologies, but I feel this is offset by the potentially much higher world demand from developping countries VS limited supply by the very nature of the commodity.

I would only buy now if I wanted to hang on for the long haul.