PRINT THIS PAGE Direct energy investments
12/09/2007. Source:PetroInvest. Martin J Cohen, CFP And Steven King, President Petroinvest LLC
In the search for the perfect asset allocation portfolio construction, direct energy investments have recorded one of the lowest correlations to other traditional investment classes, say Martin J Cohen and Steven King of Petroinvest. Should asset allocation in direct participation oil & gas programs be part of your client's diversification strategy? Quite likely if the client is sophisticated and open to a long term consistent investment strategy. In the search for the perfect asset allocation portfolio construction, direct energy investments have recorded one of the lowest correlations to other traditional investment classes.
Peng Chen and Joseph Pinsky (Ibbotson Associates, "Journal of Investing", February 2002) demonstrated that direct energy investments offer potentially significant diversification benefits and a long term inflation hedge, establishing them as a viable asset classes to be considered when constructing a long-term investment allocation policy. They also demonstrated that publicly traded oil and gas equities didn't provide the same effect.
Click here to view the full article (pdf 428kb) You need Adobe Acrobat to read this document. If you do not have it, you can download it free from www.adobe.com/products/acrobat/readstep.html Steven King, the founder of PetroInvest LLC, the Private Placement Drilling Program Exchange, has 28 years of petroleum industry experience, including the last nine years in the finance/securities industry focusing on Oil and Gas. After eight years as a pilot in the USAF, he began his O&G career in 1978 with Tenneco Oil Company and later was a founding member of Newfield Exploration Co (now a $4.3 billion NYSE listed company).
Martin Cohen CFPtm, is president of Balanced Financial Securities, an NASD Broker Dealer specializing in alternative investment services for investment advisers and broker dealers. He is co-founder of the Dallas IAFP Chapter, founder of the Dallas Society of Certified Financial Planners, and served two years on the national board of the Institute for Certified Financial Planners.
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