Planner's pulpit
How bad is it?
Posted on January 7, 2008 by Rev. John F. Harrison, CFP®
One. Hundred. Dollars. The price of oil recently closed over the historic, and apparently, psychologically important barrier of $100 per barrel. Everywhere you look, the headlines are shouting about it. They talk about how the "surprisingly resilient" economy has not collapsed under the weight of oil prices - yet. They talk about the pain consumers will feel at the gas pump. Just how bad is it?
In inflation-adjusted terms, oil hasn't been this pricey since...1981. While we are certainly seeing an upswing in energy prices, the context afforded by taking inflation into account takes some of the high drama out of the $100 figure. I think that's exactly why the media consistently ignores the inflation adjustment. Drama gets attention. The fact that it's not as bad as it looks is not a point the media will dwell on.
So where do we go from here? Some believe that various factors - the lack of refinery capacity in this country, the environmentally-driven unwillingness to tap the Arctic National Wildlife Refuge, the growing demand in developing countries like China - will continue to drive prices higher. No one knows for sure, but that certainly seems like a reasonable hypothesis to me.
If oil prices continue to rise over the next few years, we can complain about it. Or we can profit from it. There are many ways to invest in petroleum, from owning stock in oil companies and their suppliers, to sector funds and ETFs, to direct investments in exploratory drilling and producing wells.
Of course, not all investments are suitable for all investors. Call us to see if there's a place for petroleum somewhere in your portfolio. When you hold investments in oil and gas, then rising prices aren't so bad. Not bad at all.
How bad is it?
Posted on January 7, 2008 by Rev. John F. Harrison, CFP®
One. Hundred. Dollars. The price of oil recently closed over the historic, and apparently, psychologically important barrier of $100 per barrel. Everywhere you look, the headlines are shouting about it. They talk about how the "surprisingly resilient" economy has not collapsed under the weight of oil prices - yet. They talk about the pain consumers will feel at the gas pump. Just how bad is it?
In inflation-adjusted terms, oil hasn't been this pricey since...1981. While we are certainly seeing an upswing in energy prices, the context afforded by taking inflation into account takes some of the high drama out of the $100 figure. I think that's exactly why the media consistently ignores the inflation adjustment. Drama gets attention. The fact that it's not as bad as it looks is not a point the media will dwell on.
So where do we go from here? Some believe that various factors - the lack of refinery capacity in this country, the environmentally-driven unwillingness to tap the Arctic National Wildlife Refuge, the growing demand in developing countries like China - will continue to drive prices higher. No one knows for sure, but that certainly seems like a reasonable hypothesis to me.
If oil prices continue to rise over the next few years, we can complain about it. Or we can profit from it. There are many ways to invest in petroleum, from owning stock in oil companies and their suppliers, to sector funds and ETFs, to direct investments in exploratory drilling and producing wells.
Of course, not all investments are suitable for all investors. Call us to see if there's a place for petroleum somewhere in your portfolio. When you hold investments in oil and gas, then rising prices aren't so bad. Not bad at all.
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Making Lemonade
Health Savings Accounts
REMNDR
News Flash
How bad is it?
It's no secret
Responding to market mayhem
Is there a topic you'd like us to talk about? Email your suggestions or questions to us.