Simple Debt-Free Finance

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Oil prices down almost 40%!

Posted on | October 6, 2008 |

Woohoo! The price of oil is below $90 per barrel. It seems like only a few months ago we were fearing the end of the world was near because oil was headed toward $200 per barrel, and inflation was gutting our budgets. We wished something would stop the never ending march to $200 per barrel.

Well, since the sub-prime housing crisis become the credit crisis and stole the spotlight from the oil crisis we’re seeing unemployment rise, and energy prices and inflation tumble. In short, it looks like the recession the media has thought we’ve been in for the past 12 months might actually happen.

I guess we should be careful what we wish for? ;-)

I think the events of the past 12 months should serve as a reminder to every investor (401(k) included) of the importance of diversification. These events show us just how quickly the markets can turn and take you from flush with wealth to the poor house over night if you’re not careful.

I know I have gained an increased appreciation for the role of bonds and cash in my overall net worth. If I had hadn’t taken steps to eliminate my debt I would be having serious difficulty sleeping at night.

How about you? Are you looking for the nearest bridge to dive off of, or hunkering down in your bunker, waiting for the storm to pass?

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Category: Economy

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