The Business Advisory Blog

Insight, news and updates from Alliott NZ Chartered Accountants, Auckland New Zealand. The views expressed here are the views of the author and should be discussed in further detail should an article be relevant to your individual circumstances.

While every effort has been made to provide valuable, useful information in this publication, this firm and any related suppliers or associated companies accept no responsibility or any form of liability from reliance upon or use of its contents. Any suggestions should be considered carefully within your own particular circumstances, as they are intended as general information only.

Inflation

Investing your money - Black Gold

April 1980 and April 2011 have something in common. In both months oil peaked at US$116[1] and then fell. At the time of writing it is US$75[2] (US$145 in June 08). Large movements in oil prices can have huge impacts on markets and our lives, and not just at the gas station. For investors, key drivers of almost all investment-relevant prices are in inflation and interest rates. With oil plummeting, inflation expectations are also falling (as though they were not already low). And a low inflation outlook means interest rates will be lower than otherwise, which directly affects how markets price your investments in properties, bonds and shares.

The Business Advisory Blog

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