Name: 0701Stocks_TIME2
Uploaded: 2014-07-01
Duration: 1 min 41 s
Description: 0701Stocks_TIME2

As the chaos in Iraq continues to escalate, oil prices have skyrocketed right along with it. But in a strange twist, investors who own energy stocks are benefitting from the otherwise distressing situation. Even though the conflict in Iraq shot the benchmark price of Brent crude oil up to a massive $ 115 a barrel last week, the energy sector has managed to keep its head above water. A number of energy stocks have hit record highs including Chevron, Exxon Mobile, and BP. The most obvious explanation behind this phenomenon is that higher energy prices lead to more revenue for producers, but there's another reason as CNN points out. Growing geo- political tensions overseas make US focused companies look pretty alluring. An analyst who covers energy companies at Edward Jones told the outlet if you can say you don't have any Middle East operations you don't have to worry about Russia, and oh by the way we're growing our production double digits. That's a pretty attractive story for investors. Now, in the short term this upward trend in energy stocks may seem encouraging. But when those prices rise past a certain point it causes what critics call a boomerang effect on economic activity. When fuel prices soar, people drive less and stay home more. This keeps them away from stores, and prices on everything from food to plastics go up. In the meantime, experts say investors should take note of this optimistic market and adjust their expectations, just not too much. As a writer for Mney put it, if the mass of investors see only blue skies ahead, that's got to signal impending doom, right? That's not a bad mental reflex, but it can get you into trouble if it leads you to try to time the market's turns. Thanks for watching, I'm Cliff Judy.