By Constellation, the IMA’s endorsed energy partner…
Bet Your Whole Retirement on One Stock: Good Idea or Bad Idea?
Most will say right away: Bad idea. Stocks prices change every day. Would you gamble with your money like that? What if the economy drops or the company goes out of business? What do you do then?
Investors can employ many different strategies to invest their retirement savings and one of the most popular investment vehicles are Target Date Funds. These plans are designed to help achieve predictability and reduce the risk of losing the money they’re depending on for the future. They simplify the act of asset allocation and diversification to provide the best risk profile for the investor based on his target retirement date.
What does this have to do with energy?
The Natural Gas market and the stock market work in similar ways. Trying to decide which day is the best day to buy can be just as much of a gamble as betting your retirement on one stock. But businesses all over the country are still locking in one gas price – trusting their one stock.
So, what? You locked in, and it’s working fine.
… for now. Natural gas prices have been historically low over the past several months, so locking in now feels safe. But what will happen when your contract is up and it’s time to renew — will it still be as low as it is now? No one can predict the market, which is why we encourage you to take a longer term approach. Portfolio management is a proven and well-used risk management strategy that can help mitigate the risks of unpredictable market changes. Locking in a gas price now is like buying a Certificate of Deposit that pays 2% interest for 2 years … what will you do after those two years are done?
A smarter way to buy natural gas:
Investment strategies work well, which is why thousands of people rely on them. We’ve built a similar strategy, so you can feel more confident about your company’s natural gas supply:
Constellation’s SmartPortfolio provides an easy and complete approach for managing your natural gas supply costs while protecting against price volatility. With SmartPortfolio, you choose from four options with varying degrees of volatility protection to ensure you get the right level of budget certainty, volatility protection and risk tolerance for your business. Our team works with businesses to build the best strategy to plan for the long-term.
Contact us to learn more about how you can invest in your energy future. And be sure to check back on our blog soon for more information on Constellation’s SmartPortfolio.