Alejandro Paschalides manages the Energy portfolio on Covestor, and is the Founding Principal of Carina Funds. We had the opportunity to ask Alejandro how the recent turmoil in the Mideast affects his thinking about investing in the energy sector right now. His response:
The recent turmoil in the Middle East has obviously led to an increased risk premium in the price of oil. Being long energy already, this is beneficial, but it’s important to keep the move in perspective. The market is currently well supplied and the price rise has more to do with speculation and risk management than with actual demand/supply fundamentals. The economy is still weak, and sustained high oil prices could well lead us back into recession. As such, I have not made any changes to my investments. If anything, if oil prices do go substantially higher, I will actually take off some energy equities positions, in expectation of a pullback.
Here’s recent performance of the Covestor Energy model:
