Many analysts believe the price of oil will continue to rise. And if it does, shares of the SPDR S&P Oil & Gas Exploration & Production ETF (NYSE:XOP) should follow.
This ETF holds stocks of companies that are in the oil and gas exploration and production industries. These companies typically have large holdings of oil and gas. As the price of these commodities moves higher, it makes the value of the holdings increases.
This drives the value of the companies higher and the stocks follow.
Excessive inflation is bad for the stock market. But by using ETFs, retail investors can hedge against or even profit from it.
To learn more about ETFs and investing, check out the new Benzinga Trading School.
