When my daughter came to me wearing a knit cap and scarf two days ago asking why it was so cold in the house, I broke down and turned on the heat. I had to agree that it felt kind of chilly. It turned out to be 62 degrees. It is a balmy 69 degrees now.
Our heat is natural gas, and I always hate turning it on since I know that my gas bill will skyrocket in the next month and cost as much as a small car payment for the next 6 months. Have you noticed that the price of natural gas has gone up almost 25% in the past month? Just in time for winter.
Have You Hedged Your Living Expenses?
I suppose that is OK that natural gas is rising. Even though my heating bill will go up along with it, I will benefit more from a higher price since I own natural gas. No, I don't store it. I own a natural gas company's stock, Chesapeake Energy (symbol CHK). Every time natural gas prices go up, CHK tends to go up as well. It usually goes up more. In fact, I have some shares that I bought at $14.98 in March. Now, CHK is nearing $30 per share. Over the past month, CHK is up about 25% as well.
So, my question is: How have you hedged your living expenses? Do you drive a lot and use gasoline? Buy Exxon Mobil (XOM). Worried about food costs? Buy Kellogg (K) or Pepsi (PEP). Health care costs got you down? Buy stocks in the health sector that are making money hand over fist. Look at what expenses you have that might be impacted by inflation. Then look at which companies might benefit and purchase their stock. It is a lot easier to do that than keeping a grain silo or oil tank in your backyard. Plus you still benefit from increased prices.
So, don't get sad that you have to turn on the heat. Smile and think about all your neighbors turning on their heat and becoming your customers.
Until next time--Keep it REAL!