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Learning, Sharing, and Teaching => Investor Alley => Topic started by: Gone Fishing on March 08, 2016, 07:39:56 AM

Title: Using an oil based investment to hedge personal gasoline cost?
Post by: Gone Fishing on March 08, 2016, 07:39:56 AM: A friend and I were musing over using some sort of investment to hedge against future increases in fuel prices. Is this even possible? How would you do it?
Title: Re: Using an oil based investment to hedge personal gasoline cost?
Post by: chubbybunny on March 08, 2016, 07:41:52 AM: buy an electric car? stop driving?
Title: Re: Using an oil based investment to hedge personal gasoline cost?
Post by: Heckler on March 08, 2016, 07:45:41 AM: http://www.bikerumor.com/2015/08/04/giants-new-toughroad-bikes-bridge-the-mtbcx-gap-for-all-kinds-of-adventure/
Title: Re: Using an oil based investment to hedge personal gasoline cost?
Post by: protostache on March 08, 2016, 07:55:33 AM: One strategy might be to put enough into a basket of oil majors for the dividend to offset some of your fuel costs. $50,000 in a basket that pays 4% would throw off about $167/mo. Capital gains and dividends both grow based on earnings, so that would hedge against slowly growing fuel prices.
Title: Re: Using an oil based investment to hedge personal gasoline cost?
Post by: Retire-Canada on March 08, 2016, 08:11:52 AM: Quote from: chubbybunny on March 08, 2016, 07:41:52 AM
buy an electric car? stop driving?

^^ this and ad in the middle ground of reduce driving mileage and riding a bike. These options have the benefit of reduced environmental impact and better physical health.
Title: Re: Using an oil based investment to hedge personal gasoline cost?
Post by: Gone Fishing on March 08, 2016, 08:19:52 AM: I appreciate everyone's desire to use a bike as their primary mode of transportation. Point made, now let's talk about hedging fuel costs using by using a financial instrument.
Title: Re: Using an oil based investment to hedge personal gasoline cost?
Post by: CoderNate on March 08, 2016, 08:25:45 AM: You could buy WTI futures contracts with rolling expiration for the next 10 years or so.
Title: Re: Using an oil based investment to hedge personal gasoline cost?
Post by: mizzourah2006 on March 08, 2016, 08:36:15 AM: I actually think about my investment in Chevron like this. When gas prices rise, Chevron's earnings will rise and vice versa.