Hello Again, The Iran conflict continues to threaten the global oil supply. The Strait of Hormuz has effectively been closed, and now various energy production facilities in that region of the world are being turned into cannon fodder. Lower current and future supply means higher prices for everyone! This will likely affect all of our personal budgets to some degree. Especially in the areas like gasoline, groceries, airline tickets, and quite possibly mortgage rates. Yes, high oil prices can mean higher inflation, and higher inflation can mean higher interest rates. The good news is this, higher interest rates could mean better returns for money markets and CD investors. But, the longer this conflict lasts, and the longer oil is used as a bargaining chip, then the more possible it may affect the stock market too. Markets do not like uncertainty. The more uncertain it becomes, the more likely the financial markets will react negatively. On the other hand, the sooner there is some sort of resolution to the conflict, and oil begins to flow again, then the uncertainty itself fades, and the markets can breath a sigh of relief. We’ll just have to wait and see. All of us are in this together, and quick emotional decisions are more likely to be bad decisions. Rather, be aware of what is happening, and rationally think through your own situation and your own financial plans, and where you might have some excess exposure. A visit with your financial advisor may be in order to discuss any concerns you might have, or even potential opportunities for that matter. I will continue to watch these developments very closely. Call our offices to talk to your advisor anytime. Best regards, Mike |
The War and Oil Prices
