Falling Prices are the Bright Side of a Bad Economy
The media is great at spreading every negative piece of news. And the economic turmoil that is happening today throughout the world is no exception. Is it possible that there is actually something good about an economy that’s going down?
A year ago, the top news story nearly every single day was the high prices of gasoline and crude oil. The media portrayal of gasoline was actually the subject of one of my posts. The news on television showed people complaining about spending $100 to fill up their SUV. Gasoline was at $4 a gallon, and the media took the opportunity to talk about it on a daily basis. Average people were portrayed as victims of the greedy oil companies.
As we all know, the price of crude oil and gasoline has collapsed since then. Gasoline is down nearly 50%, and crude oil is down even more. The price of oil is linked to the overall economy. As the economy continues to go down, people consume less gasoline, and businesses need less oil. That causes the price of those two commodities to go down.
So, surprisingly, there is actually some good news for consumers in the down economy. I don’t know if people are happy about buying gas for a less than $2 a gallon, but I sure am. And, oil has an effect on all prices throughout the economy. We can expect that prices will fall for pretty much everything in the near future.
This is the fourth post of a series about how the down economy is good for your finances. The previous post is Tough Times are an Opportunity to Get Better at Managing Money. The next post is A Wake-Up Call for Personal Finances.
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is one of my favorite financial books of all time. It's an allegory about a guy who has a terrible job, and how he overcomes challenges to achieve his dreams.
That means…cheaper stock prices, so I am accumilating some shares of cheap stocks. I am looking to make about 50K in the market this year. People don’t understand that they need to be buying right now and holding later when the economy turns around. What do you think Warren Buffet is doing right now…buying.
@Chiko777
Hi Chiko777,
That’s true for buy and hold investors. And, it is definitely a viable strategy for investing (and getting rich). Yes, it’s true that Buffet is buying right now.
By the way, I noticed that your goal is to make $50K in the markets this year. That’s really awesome that you have a real goal. I took a look at your blog. It’s very inspiring.
George