- Oil and gas services stocks are very correlated to changes in oil and gas prices.
- There are 3 popular oil & gas services ETFs that are down over 27% from recent highs and 45% from all-time highs. A reversion to mean is likely.
- The thinned out ranks of oil & gas services & equipment companies in the U.S. have remade the ETF indexes to be very attractive, one in particular.
- One ETF has a higher potential if oil and gas prices rise, but it comes with added risk.
- The other two ETFs are fine investments for those who want a little less risk.
Using ETFs to bolster asset allocation is a core strategy for many active investors. Because asset allocation is responsible for the bulk of investor gains, I examine ETF classes for changes in valuations and price trends. I use this exercise as a way to stay on the right side of the markets and build in a margin of safety to my investing.