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7 Great Ways to Buy Energy Stocks

By U.S. News & World Report

Oil prices are seeing a bounce.

The energy sector has been under pressure for the better part of two years now. However, in late 2017 we’ve seen some glimmers of hope as crude oil prices have recovered about 20 percent from short-lived lows around $40 this summer. But the big questions right now aren’t about where oil has been, but where it’s headed — and how investors can profit from the trend if it continues. If you’re looking to invest in energy, these seven exchange-traded funds should certainly be on your list of potential investments.

Vanguard Energy ETF (ticker: VDE)

Vanguard is known for its low-fee index funds, and the VDE is a great example of that. Investors can make a play on the sector at large for a rock-bottom expense ratio of just 0.10 percent, or $1 for every $1,000 you invest. But the downside is that the Vanguard Energy ETF isn’t very tactical. Its top holdings are big names like Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX), and these “integrated energy” stocks make up more than 40 percent of the entire portfolio. If you’re looking to play the more established, large-capitalization energy companies as a straightforward bid on the sector, there aren’t many simpler or cheaper ways to do it.

SPDR Oil & Gas Exploration ETF (XOP)

So what if you’re looking for a more aggressive and direct play on energy, where rising oil prices will lift the companies that actually take reserves of crude out of the ground? If that’s your strategy, than the XOP is for you. Top holdings include small-cap exploration companies like Oasis Petroleum (OAS) and Carrizo Oil & Gas (CRZO). There are obvious risks when you stray toward these smaller companies. But since it covers the first link in the chain of crude oil production and consumption, this ETF could be the first to pop if oil marches higher.

iShares Oil Service ETF (IEZ)

Another twist on energy investment is focus on the service side. After all, tiny energy exploration companies can’t do everything on their own and mega-caps like Exxon and Chevron still contract out many services to stay lean and efficient. The IEZ covers the biggest service names in the business, including Schlumberger Limited (SLB), Halliburton Co. (HAL) and Baker Hughes (BHGE). These will be the first companies to get new contracts if we see increased spending and production by oil and gas companies, both large and small. The downside is that if oil prices stay soft or head lower, cutting back service contracts will be the first move many energy companies make.

Alerian MLP ETF (ALMP)

Focused on master limited partnerships, the ALMP is a unique way to deliver tremendous income and a bit of insulation from volatile oil and gas prices. MLPs are unique forms of energy companies that get favorable tax and regulatory treatments since they are “pass through” entities. That means they must generate more than 90 percent of their net income from transportation, processing and storage of oil and gas, rather than taking it out of the ground or selling it directly to end users. Their cash flows are much more reliable and support a roughly 8 percent dividend yield as a result.

Guggenheim Equal Weight Energy ETF (RYE)

Can’t decide which way to play the energy sector? Then let the RYE take the guesswork out of the equation. As the name implies, this fund doesn’t bias toward a single company over another and instead attempts to hold an equal position in every energy name within the Standard & Poor’s 500 index. It rebalances regularly to keep that makeup, too. By simple virtue of there being more small energy production plays instead of $100 billion integrated energy behemoths like Exxon, on the whole there is a bent toward exploration in the portfolio.

United States Oil Fund (USO)

Of course, if you really want to make a bet that oil prices will firm up, then why not just invest directly in oil — or, as directly as you can via an ETF instead of trading actual commodities? That’s where USO comes in. This ETF tracks the daily pricing of West Texas Intermediate crude oil by way of investing in futures contracts on commodity markets. That means there’s no fundamental analysis, no risk of a big earnings miss or ugly corporate public relations disasters to worry about. If you want your investment to be more closely tied to oil without the quirks and complexities of investing in stocks, this is your ticket.

United States Short Oil Fund (DNO)

All this is well and good if you want to take a flier on crude oil coming back in a big way. But what if you’re more interested in the other side of the trade, either as a way to play the downside of oil or simply as a hedge to protect yourself? If that’s your angle, look no further than the DNO — a fund that is effectively the inverse of the previously mentioned USO fund. DNO takes short positions in futures contracts as a way to profit should oil prices decline. It’s a strategy that is more appropriate for hedge funds than an IRA, so it’s certainly not for everyone.

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7 Great Ways to Buy Energy Stocks originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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