With a lot of followers/clients being Oil Experts due to long careers in the Oil Industry (For the record we find the industry wildly interesting!) we are welcoming the feedback as we make the following charts and stats available….
While headlines as recent as five years ago predicted the end of oil reserves from depletion, the belief now by the smart folks, is that we will move from Oil to renewable long before we run out of oil, making for very interesting company pivots in the future.
Could an insert your favorite energy company be the leader in some type of renewable energy resource? Not beyond the realm of a reasonable doubt if their long term viability is dependent!
Things we are constantly thinking of for opportunities and loss avoidance!
This article, originally scheduled for the Q 3 Newsletter, accidentally hit the cutting room floor. Here is an abbreviated version, with the full article to come in the Next Newsletter.
Energy our Lowered Price Friend
Airlines, heavy energy-consuming companies and summer vacationers are all cheering the lower price of oil, which tumbled dramatically in the fall of 2014. Lower energy prices act as a wage increase for most as in some way a lowered price of energy helps as a “consumer.”
As an Investor or worker in the Oil and Energy field, more of a Foe
As mentioned at the end of our Earnings Article in our Q3 Newsletter, energy has made up a great deal of the drop in earnings for the entire market as a whole. Just as vertical drilling and the various Shoal plays came on-line strong, the price as dropped like a rock.
This from FactSet: EPS estimates for 2015 — Energy is the far right diving down!
Energy and Oil Related, Friend Again
So as a consumer we are happy, but greatly overshadowed if we invest, work or have any related dealings with the energy area.
Hold on, not all is lost—
FactSet 2016 Expectations
Yep…that’s Energy expectations roaring back next year.
Another Financial Planning Tip: Spread retirement contributions Evenly
Due to control of investment options (not great) and regular contributions (that’s your dollars) spread your contributions over the year and attempt to max your retirement plan out in December.
By doing this you will lower the worry of less control of your investments AND dollar cost average into your plan throughout the year.
Remember, if it’s a new plan or your contributions are making up the majority of the account, making it a beast (aggressive) may be best.
Oil drops like a lead balloon
This ETF called USO (US Oil) is a reasonable proxy for oil prices. Don’t you think it’s hard to believe the world’s oil prices can change that fast? Of course it is. You never know if they were over priced to begin with (for a LONG time) or if they are overshooting on the downside. Our bet, the latter. We are certainly aware asset classes can stay out of favor for some time.
Here is another good example of a basket of commodities (Gold, Silver, Oil, Beef…etc) that we really like and include in portfolios for diversification. Hmmm …. looks pretty silly holding these as they fall like a rock ? Buy low!
Let’s go back to 1-1-14 and see what this same basket looked like. While not always easy to hold, rest assured they don’t always go in just a downward direction. We trimmed these positions as they weights became too heavy for portfolio allocations. Sell High!
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments may be appropriate for you, please consult your financial advisor prior to investing!
The is the vocal portion of J.K. Financial, Inc. a Dallas Texas Based Fee Only Total Wealth Financial Planning Firm. Founded by John Kvale, a Dallas Texas Fee only Financial Planner and Total Wealth Manager.
CPI (Consumer Price Index) Prints 6.8% Year over Year Increase, Quick Analysis on Likely Peak … Friday
About three hours ago, the BLS (Bureau of Labor Statistics) released their November 2021 report on CPI (Consumer Price Index) one of the broadest measures of Inflation…
If you have noticed your grocery basket smaller and more expensive, this is why….
This report has a ton of factors in it, as can be seen at the top of the chart from the BLS report, below….
The year over year print was 6.8% increase!
A very large portion of the CPI is Energy…
Have you noticed a LOWER bill to fill your tank lately?
The BLS report is lagging, below is a current Oil price, which is over 10% LOWER currently… hence the cheaper refills…
Very likely peak in CPI as measured by the BLS, next month which will be released in early January, we will take a peak and keep you updated…
Ok, another slightly heavy Friday, BUT the FOMC is watching this very closely and making decisions based on this increase, which may be peaking/lagging already…. Let’s stay tuned!
Have a Great “Friday CPI Analysis” Day!
John A. Kvale CFA, CFP
Leave a comment
Posted in Economy, Forecast, General Financial Planning, Investing/Financial Planning, Market Comments
Tagged BLS, Bureau Of Labor Statistics, Consumer Price Index, CPI, Energy