Americans always seem to be facing new financial challenges. In the 1970s, there was a gasoline shortage that created long lines at gas pumps. After Sept. 11, 2001, the stock market plunged. Now, gasoline prices in Indiana keep bubbling toward $3 per gallon.
As more money is spent on gasoline today and it looks like more money will be spent on home heating fuel this winter, how are people handling their investments?
The Brazil Times asked Lynsey Lunsford, investment representative with Edward Jones, about the current economic situation.
While money is being shifted from other purchases to buy fuel, Lunsford recommends investors stay the course they have set.
"Our philosophy at Edward Jones is to buy stocks and hold them for the long term," she said Thursday.
Exxon and other petroleum stocks can be good investments as prices rise and profits may increase. But petroleum stocks aren't for everyone, Lunsford said. Each person's situation is different and the right strategy for one person may not be appropriate for someone else.
While rising fuel prices affects many discretionary purchases, most investors do not vary the amount they set aside each month in their 401k or other investment accounts.
"I haven't noticed a change in the amount people are investing," Lunsford said. "Many people are saving for retirement or a college education."
Lunsford is optimistic about America's economic situation.
"With a buy and hold philosophy, this is a great time in the market," she said. "Things are looking up."
Lunsford's outlook seemed to prevail Thursday as the stock market changed little in the face of oil prices.
Oil prices were volatile throughout the session, and investors remained jittery about the possibility of economic growth curtailed by high gasoline and heating oil prices. A barrel of light crude settled at $63.27, up 2 cents, on the New York Mercantile Exchange after falling well below $63 per barrel during the day.
The Conference Board's latest reading of its index of leading economic indicators, a forecast of future economic activity, was somewhat encouraging with its prediction of modest economic growth. The index posted a 0.1 percent increase in July, less than the 0.2 percent economists had estimated and a sharp drop from June's 1.2 percent hike.
With mediocre economic data and little change in oil, the meandering trading session was unsurprising. However, the lack of a major selloff in recent days was cause for optimism, analysts said.
"The market is behaving like you'd expect it to," said Jack Caffrey, equities strategist at J.P. Morgan Private Bank. "Certainly oil is going to be volatile, but earnings remain strong and the economic data is OK. I think we can expect a reasonable reacceleration of the market in the second half."
According to preliminary calculations, the Dow Jones industrial average rose 4.22, or 0.04 percent, to 10,554.93.
Despite still-high crude oil prices and their growing impact on consumer spending, many analysts remain bullish, and were cheered by the market's relatively minor losses of late, noting that they came on light volume.
"Pullbacks are healthy, and with it coming on light volume, it just tells you that, yeah, people are worried, but they're not bailing out entirely," said Bill Groenveld, head trader at vFinance Investments. "Yes, oil's a worry, and that's going to be a month-to-month thing to watch. But economic growth is there and earnings are there."
The Associated Press contributed to this report.
On the Net:
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