For natural resource stock investors, the price of whatever commodity you’re producing ultimately determines your profit. When prices are high, you make more money. When they are low, you make less. It’s as simple as that. And generally, your share prices fluctuate with those prices.
With that in mind, if you want to see the definition of a roller coaster, pull up the chart of an energy stock.
Over the last few years, energy stocks have bounced wildly right along with oil prices. This sort of volatility isn’t exactly unheard of for the sector, but since the boom days after the great recession, it’s often been forgotten by investors.
Nonetheless, the continued roller coaster in oil prices and the stocks that produce crude is precisely why dividends are great.
Check out our article on why we think The Commodities Rally Could Keep Going.