Gas Prices And Investing
April 27th, 2006 by jhampton
It seems as though every afternoon when you drive home from the office you see a higher number at the pumps. Why is this gas hype hitting so hard right now? It’s interesting to see that oil and fuel companies are having record profits in light of the ‘price increase’.
Most of the American public feel as though the higher gas prices are an indicator of an economic problem and a pre-cursor to a failing economy.
Some anaylst don’t feel as this is the case:
Source: Fox News
I overlaid the average U.S. pump price (blue) with the GDP (green) and S&P 500 (red). You can see that despite ferocious peaks and valleys in the price per gallon, both the GDP and S&P have trudged ever higher.
In fact, you could make the argument that when gas prices plummeted from 2000 to 2002, it took everything else down, not up. And when gas prices started soaring in 2004? Well, the economy and market continued its upward ways.
Although there is no guarantee on how the economy or the market will fair, there is no need to be overly worried based on history of fuel prices. Just ride a bike!
Relevant Tags: economic stability, high fuel prices, investing secrets, stock market
Posted on Thursday, April 27th, 2006 at 12:54 pm In Stock Market Investing