Oil & Gas Index
The Oil & Gas producers sector on the Johannesburg Stock Exchange (JSE) is a steadily growing sector. Over the past ten years, this sector has more than doubled its worth.
The largest company that is listed on the Oil & Gas index is Montauk energy, a world leader in alternative and renewable energy research. This company has a rich history of utilising unique power sources to generate electricity. Their first success story goes way back to 1980 when the company produced a landfill gas to electricity powerplant in Chicago, Illinois. The company prides itself on the fact that it removes dangerous natural gas from the environment and converts it into precious electricity.
Another company that falls in the Gas & Oil producers sector is Sasol, a world-renowned company. Sasol became famous when it engineered the first ever solid to liquid oil producing process in the 60s. The company has seen steady growth ever since and is currently involved in quite a few international gas to liquid plant developments.
When looking to invest your money on the JSE, we highly recommend that you talk to one of our investment brokers. Apart from that, you should also do your own research into the companies that you intend to invest in. Most brokers will tell you that it is wise to invest over a wide range of companies, and not to put all of your proverbial eggs in one basket. So before you start investing, take the time to read up about the three sectors under which trade takes place on the JSE.
These are the three sectors:
- SA Financials: All of the JSE listed companies belonging to the ICB Industry Financials
- SA Resources: All of the JSE listed companies belonging to the ICB Industries Oil & Gas and Basic Materials
- SA Industrial: All of the JSE Listed companies that do not fall into the first two categories.
When you are buying shares, especially if you are just starting out, it can be safer to buy from an industry that you are familiar with. This will help you when you want to track the growth of the company you have invested in and it will help with spotting the trends which might appear and benefit you, further down the way.
The Oil & Gas index lists the top resource companies on the JSE.
Why should you invest in shares?
Over the years many South Africans have made money from the Johannesburg Stock Exchange. Founded in 1887, the JSE has been South Africa’s only stock exchange and as of 2003, it had over 700 companies listed. Companies can list themselves on the JSE, provided they meet a few requirements. Companies entering in the small cap are normally those in need of a capital boost so that they can expand their company and grow. Capital accumulation is one of the biggest reasons why a company will list on the stock exchange while bigger companies have other reasons. However, even bigger companies listed on the stock exchange need to raise money.
So why invest in Oil & Gas?
When you invest in companies that are listed on the JSE, you provide the company with funds to grow. In the case of major Oil & Gas companies, you will most likely make interest on your money, whereas if you invest in smaller startup energy companies you are unlikely to see a return on your investment, at least not in the short run. That is why you should invest in the Oil & Gas index companies, so that you can see a profit on your investment.
You should also consider the future of our planet and where our energy will come from 20 years from now. Won’t it be worthwhile to be able to say that you had a small part to play in the development of renewable energy processes?
The benefits of investing in the Oil & Gas index
Now that you have a better idea of why investing your money is a good idea, here are some reasons why you should choose the Oil & Gas index.
In a world desperate for renewable energy sources, companies that are listed on the Oil & Gas index such as Montauk and Sasol are set to keep on growing. Their research and industrial processes are invaluable to the human race and to the continued wellbeing of our planet. The worldwide search for new and anlternative energy sources will not soon be over. As such, investing in a company that is at the forefront of this research might not be such a bad idea.
The fact that the Oil & Gas index has doubled its worth over the last ten years should tell you that this is a sector that is developing steadily. And when you take into account the fact that the world is developing at an alarming rate, energy sources will stay in high demand. Investing in the Oil & Gas industry will almost definitely help you to grow your wealth.
Before you start investing, read these tips
Entering into the investment world is an exciting thing to do and more so, it can be a journey that is very profitable and rewarding. Some invest in helping companies grow and they make some money in doing so, while others invest because they love the excitement that can only be provided by the stock market. Here are some tips to think about before you invest.
- Don’t invest without thought, know exactly why you are buying shares. With a clear goal in mind, you will be able to make more informed choices which in turn will help you to clearly define what your risks will be.
- Know when it is the right time to sell. Holding onto shares when you should actually be selling them could damage your goals and cost you money.
- Have your long term goals and your short-term goals. With your long-term goals, you will have more time to plan, and you will see your investment grow knowing that you will have the money down the line. With this kind of investment, volatile shares are not an option. With your short-term goals, you can buy and sell in a shorter period and make yo0
- ur money back when you need it.
Remember to always be logical with your investments. Making mistakes is part of investing and although it can play on your emotions when you make a bad decision, you shouldn’t give up.
Ready to start investing? We are ready to help you make great choices! Speak to one of our stock brokers today to set up your portfolio. Our team of professionals can also help you if you are already an investor and you are looking for a new investment angle.