Canadian Energy Trusts

Investors are always looking for the next big thing, and many have taken a liking to Canadian Energy Trusts. They're so desirable because the cost of energy is constantly going up, and it's something that will pretty much always be profitable. Those who are new to investing will like the fact that Canadian Energy Trusts are fixed—they generally won't change too greatly—and they're a solid addition to most investment portfolios. However, since investing is overall a confusing thing, most do not know all of the facts about Canadian Energy Trusts. You'll learn a thing or two about them here.

The Definition of Canadian Energy Trusts

Canadian Energy Trusts are like the United States Energy Trust in that they are trusts in which people can invest their money in and reap the profits. However, Canadian Energy Trusts are a lot different from United States Energy Trusts in two ways. The first is that they continually replace reserves, so there's no chance of the reserves ever being tapped out, which may happen with the United States Energy Trust.

The other reason is that they're much better when it comes to tax purposes—while the United States Energy Trust can be taxed fully, Canadian Energy Trusts dividends are subject to a 15% tax break—so you'll be saving money come tax time if you choose Canadian Energy Trusts and are a United States resident.

Should I Buy Canadian Energy Trusts?

Most people are understandably cautious about who and what they invest in, so it's easy to understand why you may be a little bit queezy about Canadian Energy Trusts. However, if you know all of the benefits to Canadian Energy Trusts, you'll understand why they're so valuable.

1. Consistent Income. Over the past few years, the cost of oil has gone up tremendously. Once price at $25 a barrel, it is now going for as much as $145 a barrel. That's a huge difference, which is why many who invested in Canadian Energy Trusts a few years back have reaped huge profits. The best part of this is, there is no indication that the cost of oil will go down, so even those who start investing in Canadian Energy Trusts right now will most likely make a consistent income out of it. That's what makes Canadian Energy Trusts such a great choice for those investors who are on a fixed income.

2. Tax Breaks. As previously mentioned, American investors in Canadian Energy Trusts are treated to a 15% tax break. You won't find that if you invest in American trusts, but you do get it if you invest in a Canadian trust such as the Energy Trust.

3. Little Risk. The stock market has become a scary place for many would-be investors, which is yet another reason why Canadian Energy Trusts are such a great buy: they come without the traditional risks of interest rate fluctuations and credit defaults. So if you're worried about investing in something only to see it go belly-up, you won't have to worry about it with an Energy Trust.

4. Continuous Investments. Some stocks die out over time—even the United States Energy Trusts will eventually exhaust themselves. Because the Canadian Energy Trusts are constantly replenished, there is virtually no chance of them ever dying. That spells good news for you as an investor.