Is now a good time to consider investing in energy – particularly natural gas? eToro Popular Investor Ana Sarda Rodrigues thinks so.
“I believe we are in the early cycle of a new multi-year commodity bull run globally,” says Rodrigues, who has numerous degrees in finance and is currently a growth manager for one of Europe’s largest utility companies. “The bear market for energy and commodities ended in 2020,” she explains. It’s essentially down to the laws of supply and demand – with little capital investment in the commodity sector (oil, gas, steel and precious metals) during the last decade. Rodrigues believes that supply simply won’t be able to keep up with the world’s ever-growing demand for energy.
“Currently, I’m keeping a close eye on US natural gas equities, as I expect exports from the US to increase and natural gas to become the number one as the global switch from coal and oil takes place. This could make companies like Antero Resources and Tellurian extremely profitable in the next 1-5 years,” she predicts.
Playing the long game
In the meantime, according to Rodrigues, most of her capital is dedicated to long-term investments. “Life and investing are both long games,” she proclaims.
While no investor owns a crystal ball, keeping the future in mind is key. “My main focus at the moment is on undervalued companies with low or no debt that are on track to return massive value to shareholders in the form of increasing dividends or buyback programs.”
Embracing volatility
How does this seasoned investor adapt when markets are uncertain? “I fully embrace volatility,” she says.
Rodrigues believes in using market research to develop an investment strategy, and then sticking to it. “Once I have a strategy, I don’t change my mind based on price or purely market sentiment. The market will always try to shake you out, so having conviction is paramount.”
Her focus on long-term investments also helps Rodrigues stay unfazed by market volatility. “Ultimately, it’s important to remember that investing involves risk and there is no guarantee of returns. However, by staying informed, maintaining a long-term perspective, and using market indicators, I can make more informed decisions for the portfolio.”
Tried and true strategies
Staying on top of the markets can be challenging, but there are several strategies that Rodrigues finds helpful in making informed decisions for herself and her copiers. Here, she shares her tips:
- Build a simple model: Form a well-researched investment thesis using market data.
- Invest with confidence: Have conviction in your ideas. At the same time be prepared to make adjustments as needed.
- Go against the crowd: Keep an eye on sentiment indicators to decide when to enter, exit, and build positions. “A big component for me is always sensing when sentiment hits extremes and then trading against the crowd,” says Rodrigues. She uses technical analysis as a complement here.
- Beware greed and fear: To avoid getting caught in these common psychological traps, focus on long-term value drivers such as dividend yields and capital cycle stages. Remember that narrative always follows price.
Tips for beginners
Rodrigues also has some sound advice for those looking to get started in investing:
- Start as early as possible and invest regularly to let your money grow organically.
- Focus on long-term value drivers rather than short-term ones like quarterly earnings or daily dips and peaks. Expand your knowledge of investing so that you understand market dynamics and psychology.
- Find a mentor to help you navigate the markets. You can start by following Rodrigues or any of the many other experienced investors on the eToro platform!
Says Rodrigues about being a part of our social investing community: “eToro has greatly influenced the way I trade. Being responsible for my copiers’ hard-earned capital, as well as my own, has made me more conservative and focused on the long term.”
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