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Heating Up Your Portfolio

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With winter coming, homes need to be heated, recession or not. But what kind of energy should you buy for your portfolio? Oil or natural gas?

Natural gas might be the better play, according to Joe Terranova, as a straight play on fundamentals. “You don’t need a significant sell-off in the dollar or or geo-political issues to drive the price of nat gas higher.”

In the past Terranova has recommended that investors play the space with the United States Natural Gas Funds ETF or through the big nat gas companies like Apache.

However that’s not the only play in the energy complex that Terranova likes. Also, “look at integrated names,” he counsels but be selective. Only consider “large integrated names with great balance sheets and low debt.” Think ExxonMobil , for example.

And whatever you do, don’t play the commodity directly. “Oil appears to be challenged to rally,” he concludes.



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Trader disclosure: On Nov.10, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Macke Owns (SDS), (MCD), (WMT), (BNI), (UUP), (MSFT); Macke Is Short (BBY); Najarian Owns (BBY) Put Spread; Najarian Owns (SBUX) Puts; Najarian Owns (CHK) Call Spread; Seymour Owns (AAPL), (BAC), (F), (MER), (BX); Seygem Asset Management Owns (PTR)

Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO; Virtus Diversifier PHOLIO Owns (IGE), (DBC), (DBV)

Terranova Is Chief Alternatives Strategist Of Virtus Investment Partners, Ltd.; Virtus Investment Partners Owns More Than 1% Of (ABD), (ARE), (BIG), (CLB), (DLR), (EPR), (EXR), (MAC), (SLB), (SKT), (UA), (IGE), (DBC), (DBV); Virtus Investment Partners Owns More Than 1% Of Seagate Tax Refund Rights; Virtus Investment Partners Owns More Than 1% Of Shares Of Essex Property Trust Inc.; Virtus Investment Partners Owns More Than 1% Of Shares Of Corporate Office Properties Trust SBI MD

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