In early 2016, oil prices bottomed out and a wave of North American oil producers continued to file bankruptcies at record and alarming rates. Where are we a year later? Oil prices have increased, generally the result of an agreement by OPEC members to reduce output, which based on longstanding distrust among its members, may change at any time. With potential uncertainty amidst, the formalities of Brexit, and President-Elect Donald Trump taking the reins as President on January 20, 2017, the world is unpredictable!
The market’s overall appreciation more than likely positively impacted your overall investment portfolio in 2016, unless of course you happen to own securities (i.e. Boeing or Ford) that were subject to one of Trump’s famous tweets. However, if you were an investor of securities linked to the oil, gas and energy sector in the past couple of years, chances are your account statements still show that many of these securities lost a substantial portion or their entire value of your principal.
In many investments, your principal investment is gone, and depending whether these investments were Master Limited Partnerships (“MLPs”), you have or very soon will receive a K-1 indicating that you may still owe additional taxes – yes, on that same investment that you lost all or most of your principal. This has left many investors simmering!