Investors being warned to not invest in growing oil stocks

Investors being warned to not invest in growing oil stocks

Investors going to retirement are usually tempted to invest their money in stocks that could potentially give them higher returns. However, they are being warned against what seems to be more promising stocks, being growing oil stocks or high-dividend oil payers. These include CGX Energy and Enbridge.

Due to many people shifting towards electric cars rather than the traditional combustion engine cars, society’s reliance on oil is decreasing. The political power once held by oil companies is now deteriorating and with it their ability to sustain the market for oil.

There may come a time when traditional oil companies will have to step down and let renewable energy sources take over. This includes not only cars but also other means of transportation.

For example, CGX Energy is an outdated oil exploration company. It explores oil and gas offshore in Guyana Suriname Basin in South America. It was reported than people earning per share was a mere $0.08.

The company was able to reach a price of $15 per stock in a project, which later failed due to oil reserves being low and safety concerns.

As a result of this failure, CGX lost almost 43% of its value in April of 2012. This declined continued till next year, in March 2013, when they started trading at $0.08 per share. Company officials said the company stood at a very delicate position, heavily dependent on financial aid and assistance. They add that the company might have to shut down unless they raise the capital further than it has already risen.

In spite of everything, the company still stands and is in operation. However, investors should be careful and should evaluate the choices they make from every angle. They have been warned specifically against investing in black gold. Instead, they should go ahead and invest in emerging technologies and advancements.