Photo:intimaj, Creative Commons, Flickr

Many Big Oil companies still have solid fundamentals.

One of the main rules for investing during volatile times is to look for companies with strong fundamentals. This is especially true for an investor like me who isn’t overly active and who likes the less-sexy “buy and hold” strategy. The idea is to look for companies with strong underlying value, and then buy more shares when the stock is pulling back a bit. That way when the market (and the company) recovers, you make more money since you were able to buy more shares.

And it’s tempting to get into Big Oil right now. After all, what is more fundamentally sound than a company like Exxon Mobil (XOM) that has a proven business model and a penchant for making huge profits? Big Oil stocks have remained relatively stable (though they are down from last fall) throughout, and recent events seem to indicate that they will go up. (Well, maybe not BP — BP, it’s the one Big Oil company that I consider kind of shaky.)

But for the environmentally friendly investor it’s hard to justify investing in Big Oil. This is why Statoil (STO) offers such an interesting option. It is an oil company, but it is also trying to work toward carbon neutrality. And it appears to offer good valuation.

In any case, the market could (it probably will have at least another dramatic drop or two) fall further, In which case you could buy even more stocks. But it might not be a bad idea to make a play for some carefully chosen energy stocks now, just in case the market starts moving back up.

Disclosure: I do not invest in any of the stocks listed above. I am considering STO.

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