Get Started

SNARFER

Striking Oil or Slipping on an Oil Slick?

Striking Oil or Slipping on an Oil Slick?

 

By Michelle McKinnon, Financial Advisor

Today, I’d like to talk about oil prices. I’m sure a lot of investors out there can think back to January and February when the price of oil was all over the news. You couldn’t turn on Fox or CNN without hearing what the price was that morning and how much it had declined. In turn, the media was basically predicting the fall of society just because of low energy prices.

Three Keys:
1

In January and February, plummeting oil prices caused a near-panic in the media

By a few months later, oil had rebounded significantly and continues to climb

Focusing on long-term goals over short-term fluctuations is a better way to invest

Well let’s take a closer look at that previous trend. By February, the price of oil had dropped from about $100 per barrel the year before to $27. That’s a precipitous decline. So all these people were of course screaming that we’ll never use oil again and it was a dead commodity. Well I’m not sure about everybody else, but I kept hailing taxis in New York City, and I think I took at least five flights during the first few months of the year. So realistically, people pretty much kept consuming oil at the same rate.

What’s happened since then? By the end of May, oil actually closed a little higher than $45 a barrel. That represented a climb of more than 40 percent in about three months. By the end of June, it had risen back to $50 a barrel. So the lesson is, maybe we should stop focusing so much on what people say in the media, and instead keep concentrating on our long-term goals.

Perhaps we should have listened to the fabulous and famous Warren Buffett a few months ago, when he actually invested significantly in Phillips 66, a multinational energy company based in Texas. So again, I know sometimes the short-term view can be scary when the markets are all over the news. But just hold tight, because in a few more months the clouds will probably clear and you’ll see blue skies again. That’s happening now with energy prices, oil prices, and emerging markets all on the rise, indicating that the previous turmoil is starting to settle down.

 

$mart_women

 

 

Tips & Tricks for creating a wealthier life.

IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Payne Capital Management, LLC), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Payne Capital Management, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Payne Capital Management, LLC is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Payne Capital Management, LLC’s current written disclosure statement discussing our advisory services and fees is available for review upon request.