Self-Directed IRAs Provide Uncommon Investment Opportunities:
Part 1
Many investors have become disillusioned with the traditional
investments available to them through traditional channels. More
and more investors are looking for ways to invest their
retirement dollars for a larger more consistent and safer
return. The problem is knowledge and investment tools. The
investor armed with a self-directed IRA and investment knowledge
will certainly earn far more in his portfolio. Oil and gas
certainly has very good potential for the IRA holder beyond
stocks in the large oil companies burdened with huge overhead
constraints.
When conducting your due diligence on a company that drills for
oil and gas to determine if it is a good investment, it is just
as important to research the current market trends.
Investigating into the investment of oil and gas provides a very
clear picture of supply and demand. The effects on these
resources are far reaching from the gas pump to the milk
container.
Currently, Americans consume more oil and gas than the U.S. has
in natural resources. As a result, this places a high demand on
foreign sources of oil and gas subsequently, the price of oil
and gas are driven higher. In recent history, oil prices were at
$28 per barrel compare that with today's oil price of $58 per
barrel, the return on investment (ROI) for an investor is
potentially incredible. Other global, environmental and
political pressures have influenced prices. These influences are
as follows:
* China and India, the most populated countries in the world,
have become increasing their demand for oil because of each the
country's increased growth in population and economies. * The
U.S. is currently at full capacity for refining process
(refining is the processing of crude oil into a usable form) of
crude oil that comes and there are currently no plans to build
additional or more efficient refineries. * The legislation of
the past administrations have also placed strains on the
processing industry as further requirements increase the cost of
refining. This also put s an enormous strain on supply and the
result is higher oil prices. * Natural disasters such as
hurricanes may also cause an increase in prices especially since
a large portion of the refineries are located in the Gulf Coast
region. The effect of these trends will likely increase current
pricing and future pricing. Another hurricane with the power of
Katrina will likely cripple our fuel supply. And given the
current weather trends that is a very likely occurrence.
Not surprisingly, there are financial analysts who have
predicted oil prices to go beyond the $100 per barrel milestone
in the near future. Because of the pressure of these high prices
and changes in drilling technology, many drillers are exploring
more areas within the United States to drill for oil and gas.
A Self-Directed IRA provides the investor with the ability to
invest in direct participation or in whatever position is most
important to the investor. A Self-Directed IRA with checkbook
control provides even greater control and ability to move upon
opportunities when they arise. Of course, the gain is
tax-deferred just as it would be if stock or a mutual fund were
purchased.
Copyright 2006