Fill Up Your Portfolio With This Profitable Company

When it comes to a measuring a company’s health, little can compare with overall profits. The more profitable a company is, the better. And no company in the world is more profitable than ExxonMobil (XOM). For anyone who drives a car and pays $4/gallon for gas, this should come as no surprise.

In 2008, the petroleum industry is where you want to be. And while few of us can avoid buying gas, we can at least make back a little of what we’re spending by investing in ExxonMobil. The stock was around $70/share at the beginning of 2007, and recently closed at around $94/ share, a 34 percent increase.

Keep in mind that you need to go into any investment – even a seemingly great one like oil – with your eyes open. As Rick Pendergraft mentioned recently, the economy can’t sustain the gas price crunch on consumers for long. And as Andrew Gordon pointed out in an article about the future of gas prices, new technologies are on the horizon that will “upend the demand side of oil” and “make inroads on increasing the supply side.” Those technologies are still a few years away. In the meantime, if you’re cautious, there is no reason you can’t profit from Exxon’s stock movements.

For the short term, oil is a good investment. Americans still drive everywhere, often with no one else in the car. And while a trend toward smaller cars has begun, gas-guzzling SUVs still dominate our highways. So, like it or not, ExxonMobil and its counterparts will continue to cash in on high gas prices for the near future.

Add ExxonMobil to your portfolio to help offset rising prices at the pump. But keep your eyes peeled for the inevitable reversal – and be prepared to jump ship as soon as gas prices start to slip. Protect yourself by setting a 25 percent stop-loss point. That way, you’ll get out with 75 percent of your profits intact.

[Ed. Note: Making good investment choices doesn’t have to be hard – especially when you have an expert guiding your decisions. In fact, some of the most effective investing rules are so easy, a fifth grader could understand them.]