Energy Stocks as a Separate Portfolio Allocation

Posted: 19 Jun 2010 Last revised: 1 Apr 2020

See all articles by William W. Jennings

William W. Jennings

U.S. Air Force Academy - Department of Management

Date Written: August 4, 2010

Abstract

I examine energy stocks in the context of a diversified investment portfolio. Several factors – the importance of the energy sector, their potential to hedge energy risks, growing interest in real assets, as well as anecdotes of sophisticated investors focusing on energy investments – motivate this look at energy stocks. I demonstrate that a separate allocation to energy stocks enhances portfolio efficiency and hedges against inflation and inflation surprises.

Keywords: portfolio choice, mean-variance optimization, asset allocation, endowment investing, energy investing

JEL Classification: G11, L31, L71, N50, Q40

Suggested Citation

Jennings, William W., Energy Stocks as a Separate Portfolio Allocation (August 4, 2010). Available at SSRN: https://ssrn.com/abstract=1626535 or http://dx.doi.org/10.2139/ssrn.1626535

William W. Jennings (Contact Author)

U.S. Air Force Academy - Department of Management ( email )

2354 Fairchild Drive
Suite 6H-94
Academy, CO 80840-2944
United States

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