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| Adrian Mastracci, investment counsel at KCM Wealth Management, says “We are feeling the pinch in our wallets. Every one of us. The price of crude oil impacts just about everything in the global economy." |
For Immediate Release
Vancouver, BC (August 5, 2004): Pop quiz. When was the price of crude oil in the US$32 area? How about the December 31, 2003 closing price of $32.52 per barrel. And here we are today in the neighbourhood of $44.41, perhaps going higher.
Adrian Mastracci, investment counsel at Vancouver's “fee-only” KCM Wealth Management, comments, “We are feeling the pinch in our wallets. Every one of us. The price of crude oil impacts just about everything in the global economy.”
Mastracci goes on, “Let's step back for a moment. Oil is essential to run the factories, it's a component of many products that we buy and is required for virtually all modes of transportation. Not to mention home heating for some.”
“The biggest visible display of oil prices is at the gasoline pump,” says Mastracci, “No doubt the price rise may change some vacation plans based on driving.”
“I don't think many of us would like to be at the helm of an airline company trying to cope with jet fuel prices of today,” adds Mastracci, “And consumers unwilling to pay much more for the ticket price.”
“A 35% rise in just over seven months is not something that everyone can endure,” observes Mastracci, “Perhaps, the other question is how many people do we know that have had a 35% raise in income this year?”
“These skyrocketing oil prices demonstrates the significant impact inflicted on the markets in a short time,” points out Mastracci, ”No wonder the markets can get rattled from day-to-day. Clearly, they don't like the uncertainty for the global economic pulse.”
“This has affected, and will continue to affect, all investment portfolios,” indicates Mastracci, “It would be wise to anticipate market volatility to continue for the foreseeable future. If we get a break from this, it would be a welcome bonus.”
Mastracci offers these comments for investment plans:
- Review the investment expectations.
- Revisit the investment policies and strategies to reach the chosen destination.
- Get to know the asset mix suitable for the situation.
- Stay with quality wherever possible, both on the equity and fixed income components.
- Make portfolio diversification your friend.
“Oil prices could move in either direction with little fundamental reason to support it,” concludes Mastracci, “We are into a period of uncertainty. Possibly one of long uncertainty.”
Mastracci summarizes, “Staying focused on the long term goal of the exercise is important for the success of the investment plan.”
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