I’ve just come across your blog on google, nice work. I work as part of the marketing team at Joslin Rhodes (we’re a retirement planning company in the UK) . We focus on lifestyle financial planning, our main goal is helping people to retire earlier than they thought was possible.

We’re in the process of producing a roundup blogpost on “The Top 10 Expert Tips to Early Retirement”.

We think you’d be a great addition to our blog post.

If there’s one top tip that you could give to someone to help them retire early what would it be?

If you can give us a nice short answer to this question, we’d love to feature your answer on our post and link back to your site!

Hope we can make this possible!

Kind regards,

Tom

Contango is indeed a problem for impatient retailer investors, if the price at spot vs futures contract is out then each month the ETF will cover and lose x%. But it works both ways i.e. backwardation when price returns and outpaces the futures price.

I’ve held ETFs for months at a time without issue, letting them settle the ‘paperwork’ and take their fee. Yes, this does mean next month because of contango I could lose 30-50%, but months down the line that could be a positive 30-50%.

During this period, I will short against myself if I feel contango is an issue, give myself temporary cover. I typically only short for … short periods. Days, weeks, never months because then I wouldn’t sleep easy!

The biggest risk is the ETF goes bang. Not impossible in the current climate… but then any business can go bang too.

All I know is that ‘dollar averaging’ has worked for me through the last recession and I’d wager it will again, oil is part of that process for me. :)

I thought the main issue with owning oil is that you can’t simply buy and hold as you suggest during these times because of contango. To give you an example, CRUD ETF was around $5.00 when WTI was $32. As we speak WTI is down to $24 and CRUD’s price is $2.65. See the problem? Oil is 25% down so CRUD’s price should be $3.75 in theory. A 30% difference!

Sure you can buy these 1-month future products but it has to be very short-term so I’d be interested to hear more about how you do it.

I just use another ETF! Basic, but does the job. :D

I’m sure I could save a few % a year using a dedicated trading platform, but an ETF through my brokers (one being HL) is okay.

Oil prices are generally rational and follow a cadence, recent events have put this way out of the acceptable range. Sure, the economy can hold this down for many months but the reality is, supply will slow and we will see some elasticity up. We could of course see a trench down before that, but I’m confident within a reasonable period a buy at ~$20-25 is a sound position for a mid-term view.

I think it comes down to the same old thing, if you can sleep easy on your decisions – keep making them. I sleep like a baby.

The black gold is clearly working for you Ed ;) Which platform do you use for shorting?

When WTI dropped below 0, the first thing I did (after eating my porridge) was open a short on Brent.

I closed at ~$20 and reversed my position. Went long WTI at the same time. Both are currently up and I intend to hold until at least $45.

If the spot price becomes too wide between the two, I might short Brent again. But… generally speaking – I’ve had my ‘short’ term fun, now I sit and wait. It might be a few months, could take a year. I don’t have a crystal ball, just patience and a reasoned opinion.

I’ve been ‘trading’ oil like this for years, using Wisdomtree ETFs (CRUD and BRNT). Never had any issues.

Over the past 11 years I’ve made 17% a year with oil, I love the black stuff!

Thank you Damian, glad you liked it.

Journalists? :) I can imagine, it must be really dangerous to store oil. I guess even if wanted to take physical delivery, I’d probably outsource the whole ownership/insurance thing to professionals. Similar to how people buy physical gold with Bullionvault.