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Giggle And Bytes

Ruchika Dutta

Teacher | Posted | Share-Market-Finance

Is investing in oil and gas stocks like GAIL, IGL, and Petronet LNG a good decision for next 5 years?


Entrepreneur | Posted

I am going to put this in simple words. If you’re looking to invest your money in the stock market, oil and gas industry should NOT be your go-to. This is not to say that they are a bad choice or the existing investors there don’t get benefits from their holdings (they do!). But nowhere is this avenue a foremost choice.

Traditionally, oil and gas stocks were always believed to be a great choice for a long-term, sustainable return. In fact, for those looking to put their money for like 10 years, this one was a lucrative choice. But that’s not necessarily the case today. Contrary to the speculations of the industry-optimists, the stocks of oil and gas companies, including the ones you mentioned in the question, have failed to stand tall on all the expectations. Over the past few years, it didn’t really deliver as much return as the stocks of other industries. And this is quite fitting given more and more innovations are happening around eliminating the use of natural resources and using renewable energy.

Also, broadly speaking, with tech sector rising to new glory every year, and pharmaceuticals still #1 choice for long-term investment, oil and gas industry has really lost its charm. Of course, nowhere is it going to be less relevant. For smart investors who are looking to build a solid and sustainable portfolio, this is a decent (and, at times, an essential) choice.

But for new investors, or like you mentioned, for those looking to put their money in some stock for 5 years, there are better options than oil and gas companies. So, if you’re just starting, invest in IT, Pharma, Housing, Infrastructure, and Logistics. After investing here, if you want to continue to expand your portfolio, go for the stocks of oil and gas companies.



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