Investment Q&A

Oil 'predictors' could be wrong, or right, of course. We can find BNN commentators who think oil is going to $100. This is what makes a market. There are positives and negatives. More drilling in the US, a China slowdown and OPEC overcapacity could bring prices lower. But overall exploration has been very low, as companies preferred to pay dividends and buyback shares rather than drill. Middle East tensions could flare up anytime. China is taking measures to stimulate its economy. Stock valuations, including those of the companies in the question, are so low that we think a lot of risk is reflected in valuations. We think some energy exposure is certainly justified. The TSX, however, is at 17.2%, and we would consider that too high for current conditions.