Oil Money 🛢️

Oil Money

“Oil Money” has become a common phrase in the world now that some nations have built themselves from the resource. The Middle East is known for its massive oil reserves, and countries like Qatar and Saudi Arabia are starting to develop quickly with their riches. Oil money has been a major complaint in sports too, whether we are talking about the soccer world or LIV Golf. Even with the human rights complaints in the area, there’s no denying these countries are making a lot of money in the current economic climate.

On Monday, we discussed how the energy market has allowed Saudi Arabia to record grand surpluses that they can use to invest. Some of it will go towards future plans regarding Vision 2030, but new filings showed us that they are tapping into some big businesses too. The Public Investment Fund, which is Saudi Arabia’s sovereign wealth fund, invested $7.5 billion into American companies in order to diversify their assets. Companies that they bought include Amazon, Alphabet, JPMorgan Chase, and Microsoft with $400-500 million invested in each stock. This follows investments into Nintendo and Aston Martin, and if one thing is clear Saudi Arabia loves the tech sector in America. Their portfolio now consists of substantial amounts of stock holdings, Saudi Aramco, Newcastle United, LIV Golf, and plans to build a smart city near the border with Jordan, among others. These companies are likely to benefit from the additional buying volume, but their investment performance has been a bit spotty as the value of the stock holdings has fallen by 38 percent over the past 2 years, while the S&P 500 is up 26 percent.

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

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