Economists say the 57 percent drop of oil prices since late June will be a boon to consumers, with the Energy Information Administration forecasting that we'll enjoy savings of $550 per household this year thanks to falling gasoline prices.
But what about our retirement accounts? Could they suffer from falling oil prices?
"This concern doesn't seem to carry a lot of weight, at least at this point in time," writes
Chris Moony of The Washington Post.
"I mean, sure, if a person were exclusively or mostly invested in oil stocks or oil intensive funds, then yes, their 401(k) is probably worth less now than it was six months ago. But this is precisely why investment advisers tell us to diversify, diversify, diversify, and invest for the long term."
In the same seven months that oil prices have dropped 57 percent, the S&P 500 index has climbed 4.3 percent, and the 10-year Treasury yield has slid to 1.91 percent from 2.62 percent.
Many companies will benefit from the lower energy costs on "various kinds of transportation/operations costs," he notes, and they might also benefit because consumers will have more money to spend on their products.
"So as far as 401(k)s go, this is really a moment that underscores the importance of portfolio diversification. And if you are diversified, then you are probably up overall, just as with the general market."
CNBC commentator Larry Kudlow discussed the advantages of lower oil prices last month on
Newsmax TV. "This is a gigantic tax cut for the American economy," he said on "The Steve Malzberg Show."
"It's not a marginal tax rate reduction, I'm just saying it has the same impact. People will have much more disposable income to spend on other goods and services, and the middle class needs that because they've not had big wage gains."
The oil price drop is a gift for corporate America too, Kudlow said.
"Businesses need this," he argued. "Manufacturing companies and retailers and everybody else, they all have fuel costs, they all have heating costs."
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