Oil Stocks are Cheap

After the US Killing of Iranian general Qassem Soleimani, tensions between the two countries skyrocketed. The tensions caused by the killing caused a panic in the stock market, and as a result, many stocks dropped in the days following. The stocks have begun to recoup their losses as the fear of war slowly dissipates, but tensions still exist between the two countries, and fear still lives in today’s stock market. To combat the tension’s effect on oil prices and the stock market, it might be wise for investors to hedge the risk of Iran in their portfolios by investing in US Energy Stocks. For the past years, energy companies have been some of the worst performers in the S&P 500, but with the tensions in Iran and the rising prices of oil, these energy stocks are primed for a rebound. For investors, the conflict between the United States and Iran should be closely monitored; if tensions escalate and OPEC cuts oil supply, oil prices will rise and the affinity for energy stock will increase. Hedging portfolios with energy stock might not be the next Microsoft, but it could add value to your portfolio. 1.13.20