As a consumer I am constantly feeling the pain of rising oil prices whenever I fill gas in my car. As an investor though, I regret missing out on the run up in companies that benefited from higher oil prices. It seems that apart from energy related stocks all other equities are generally heading south. Despite ongoing volatility, oil prices don't look like they are going down anytime soon. As I currently have no investments in oil sector or related companies and don't want to miss out on further potential gains, I had decided to do some research around good oil related investing options.

After researching and reading about various oil and related services companies I was still not sure which stocks should I invest in. A number of companies look good, but are they too over priced or risky? So rather than pick a specific "hot" company like some of my recent forays, I decided to take a less risky and more diversified approach by investing in an Exchange Traded Fund (ETF) that I recently read about. It could also provide a good way to use put options on the ETF in the expectation that oil prices will fall - though I don't recommend this unless you are comfortable with options.The ETF I am talking about is the Global Energy iShare (IXC).

Bullish analysts and oil veterans say that oil only has one way to go and that is up - "We are now deep into a monster, generational bull market for energy. This is making recent manias -- like the dot coms and real estate -- look like very small beer. The fundamentals are strong. And ordinary people simply must be on board" said a recent WSJ article which was painting a very bullish case for IXC. The author goes on to say "Just buy a small stake in this diversified energy fund, and then keep adding to your position steadily and in small amounts. You won't buy at the bottom -- but you'll avoid buying at the top. This boom, like all others, will see plenty of bumps along the road. But the direction we're taking is pretty obvious"

I will look to take a small position in the IXC ETF in the coming days. However, I also believe that oil is headed for a minor correction so am not rushing in to buy and can afford to wait for a good entry point.

I do believe that in the long term oil and subsequently gas prices will almost certainly rise. The supply and demand fundamentals are too strong and people cannot change their driving habits overnight. Even at $5 gas, people will still drive almost as much as they do now. Oil demand is inelastic and you don't want to miss out on this trend. Rather than place all your bets on one or two stocks, diversify your risk and choose this or another similar ETF.