What percentage of your portfolio should be in Big Oil and what stocks would you include?

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Mark Lennihan
Gas Pump

“I believe it depends on an investor’s style or risk tolerance. For the middle of the road investor, it should be 10-15% of your overall portfolio. For those folks that don’t like the feel of roller coaster rides or bungee jumping, the exposure may be less than 5% in this sector. And finally for the speculative folks that love risk, the exposure to energy may be greater than 25% of their portfolio. The bottom line is, it depends on the investor’s comfort level and investment focus.” -- George D., California

“Most investors should have no more than 15-20% in a single stock or sector. That also goes for company employees who may keep adding their own company's stock, didn't work so well at Enron. Diversification is always the key to long-term success.” -- Jeff J., Wyoming

"25%-30% and the stocks should be oil drillers....Transocean (RIG) Slumberger (SLB) Chevron (CVX) Valero (VLO)." -- L.G.

“I don't think you should have anymore than 10% in big oil, which is done from my usual maximum of 20% allocated to one sector much like Cramer always tells me. Right now, there is way too much froth in an oil market where catalysts are running out. If you want to play big oil, the only way is through Canadian Natural Resources (CNQ). No matter what oil prices do, this company has an expanding production profile with a massive buyback.” -- Evan F., Canada

"Thirty-five percent should be in oil; 65% gold." -- O.L.

"Most oil companies, either downstream or upstream producers, are overvalued with respect to most indicators associated with the industry; for example, most companies trade at 6 times cash flow or 4 to 5 times book value. However, the commodity cycle continues to be stabilizing at the most recent highs, and therefore, approximately 10% of your portfolio should be invested in the oil industry. One company that is significantly undervalued is Petro Canada (PCA) that trades on the TSX. Intrinsic value of approximately $40 per share and currently trades at $48.95 whereas most Canadian oil producers trade at 4 to 5 times intrinsic value reflecting the rise in the underlying rise in the price of oil. With China hosting the Beijing Olympics next year and continued problems with refinery disrupting supply, the price of oil will continue to trade in a heightened range throughout the rest of the year." -- Greg., Toronto

More Comments

"My portfolio includes CVX and and and energy mutual fund; approximately 11% at this point." --
Robert M., Pennsylvania

"10% of stocks in big oil - Conoco Phillips and Chevron" -- Bill H., Georgia

"I would still be slightly overweight in the Energy Sector at about 12%. As for the main stock in this sector, it would have to be Exxon Mobil. I have been buying Exxon since Hazelwood wrecked the Exxon Valdez, so you know I have had a great run with this stock!" -- Dan M., Pennsylvania

"In the past 18 to 24 months, my portfolio has included XOM, COP, WFT, Burlington Resources, and Ocean Engineering. Right now, I own XOM, COP, and WFT. Luckily, I have gotten some great advice regarding oil and oil service stocks and have taken advantage of the positive activity in the sector. At any one time I would say about 15 to 20% of my portfolio was in oil. I have no complaints!" --
John C., New York City

"30% of portfolio is oil: 15 % xom; 5% cop; 5% cvx; 5% wft" -- Hank E., Texas