What Impact Could Oil Prices Have on Investors?

The U.S. is now a leading oil producer and net exporter, reducing its exposure to global supply shocks. Meanwhile, consumers are using less oil, and energy's weight in the market has declined significantly, from over one-third of the S&P 500 in 1981 to less than 4% today. Oil still matters, but it no longer carries the disruptive power it once did. However, sharp oil price increases can still cause sector-specific shocks, fuel inflation, and influence interest rate expectations. The key to protecting yourself is to maintain a diversified portfolio. If you have questions about your investment exposure to oil price fluctuations, speak with your financial advisor.

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