Kavan Choksi: Why Invest in Our Natural Resources?

Oil and gas remain in very high demand. It may even be more in demand today than ever. It is even with the presence of alternatives being discovered or developed all over the world.

According to business consultant Kavan Choksi, petroleum, natural gas, and other similar products have been popular sources of heat and energy. They are also being used in the creation of asphalt, lubricants, wax, plastics, and more.

It's this abundance of opportunities that makes investing in these natural resources a sound decision. If you are looking to put your finances in an investment, oil, gas, and other natural resources may be a good idea.

In addition, you'll be improving your portfolio by diversifying it.

Throughout the huge expanse of more modern human history, oil and gas have been a tremendously effective diversifier for any investment portfolio.

Look at a slow economy that causes most stocks and funds to stagger. It usually entails higher oil and gas prices. It consequently triggers a rise in stocks in this sector.

Such investments can then help insulate a portfolio from fluctuations in the market.

Kavan Choksi explains that the potential profit margin of both oil and gas is very high. It's even a lot higher than a majority of investment vehicles. It is true, especially when the funding is infused into smaller companies.

Striking big on a single well can pay huge dividends in the short- and long-run. Now, imagine what discovering multiple wells can do for you.

Furthermore, you'll have robust tax benefits. These benefits can be had when investing in oil and gas. That is thanks to federal tax codes.

Examples of these tax incentives are deductions for drilling costs, lease cost deductions, depletion allowance, 1031 exchanges, and many more, adds Kavan Choksi.

Kavan Choksi is a business management consultant. He has always shared his business, finance, and economics insights with his blog readers. Access his articles by clicking this link.