It’s a challenge to find an investment that gives a decent rate of return, and cash flow. Most stocks have been in a bull market since 2009 and are near all-time highs. Although no one has a crystal ball that can accurately predict the future, most stocks appear to have limited upside… and a lot of potential downside.
With the Fed keeping rates at all-time lows, high-grade corporate bonds don’t pay a lot more interest than a bank CD. Investors have to take big risks investing in junk bonds (companies or entities near bankruptcy) in order to get even 5 or 6%.
Even the Federal Reserve slowly raising rates, no one knows when the Fed will raise interest rates back to “normal” levels. With the tens of trillions of American debt at the government, corporate and personal levels, any rise in interest rates would increase interest expense and negatively affect cash flow for entities, businesses and negatively affect cash flow for entities, businesses and households.
History shows that you can’t rely on any government to improve the economy or get a better return on your money. That’s why wise investors seek out entrepreneurs who can find or create profitable investments. And that’s been our mission from the start at EnergyFunders.
We typically look for oil and gas projects with proven reserves, financially-sound operators with a proven track record, and wells in the best locations and geologic formations. This gives you, the investor, an opportunity to receive above-average returns and grow your wealth on a real (inflation-adjusted) basis.
However, there’s no such thing as a risk-free investment—especially in the oil and gas sector. While we can’t eliminate risk, we do our best to minimize and manage this risk.