Friday, December 18, 2009, 6:53AM ET - U.S. Markets open in 2 hours and 37 minutes.

Jeremy Siegel, Ph.D. The Future for Investors

Jeremy Siegel, Ph.D., The Future for Investors

Oil’s Not Well in the U.S.

by Jeremy Siegel, Ph.D.

Email this Page IM this StoryBookmark this StoryAdd to your Del.icio.us accountDigg this StoryPrint this Story
Very Good (617 Ratings)
3.625602/5
Posted on Friday, May 30, 2008, 12:00AM
What seemed virtually impossible just six months ago has turned into a harsh reality. Oil has crossed $130 a barrel and could be headed much higher. We know that oil price increases benefit oil producers and hurt oil users. But how does this all balance out and what is the overall impact of this spectacular rise in the price of crude oil on the US economy?

Since the US is a net importer of oil, higher oil prices hurt our economy. The United States produces about 8 million barrels of oil a day, but we consume over 20 million barrels. That means that we are net importers of 12 million barrels of oil a day, which, at $130 a barrel, comes to about $1.5 billion. This is the amount that we fork over to foreign oil producers every day. At current prices our yearly oil purchases will total $570 billion this year and account for the lion's share of our trade deficit.

Because US GDP, the total value of what we produce in a year, is about $14 trillion, the cost of importing oil at current prices is just over 4% of our total output. Since a year ago oil was about $70 a barrel, the extra amount we pay for oil will eat up an extra 2% of our GDP.

To put this in perspective, the long term rate of productivity growth in the US is just over 2% a year, so rising oil prices will negate a whole year's improvement in our standard of living.

Worse Than the Housing Slump

This loss in real output is significant and exceeds the drop in the housing construction since the real estate boom ended. At the end of 2005 the US was spending over $600 billion on residential construction. That has now shrunk to less than $400 billion and has been a major contributor to the slow growth of GDP.

But there's a critical difference between housing and oil that makes the impact of higher oil prices much worse. The housing bust is due to a slowdown in the demand for housing, not in the supply of a critical commodity, such as oil.

This means that many of the resources that had previously gone into the housing industry, such as labor and materials, can now be released to other sectors of the economy. In contrast, rising oil prices are an outright cost that does not release other resources into the economy.

Adjustments to Estimate

The above calculations are a "first round" estimate of the cost of rising oil prices to the US economy and assume that we consume the same quantity of oil at $130 a barrel as we did at $70. This is unlikely, as higher prices will encourage many to cut back on oil. Economists call the response of the quantity purchased to a change in price, the elasticity of demand. The higher the elasticity, the lower the impact of rising oil prices on the economy.

Unfortunately, the elasticity of demand for oil is small, especially in the short run. First, there are not good substitutes for oil, and many of the substitutes that do exist have also shot up in price. Even those who are lucky enough to be able to use natural gas instead of heating oil to warm or cool houses have seen prices rise more than 40% over last year. The rising cost of all forms of energy reduces the ability of consumers to avoid higher energy costs.

Furthermore, there are also factors that increase the impact of oil costs beyond the $1.5 billion that we pay to oil producers every day. Even if the US were lucky enough to produce enough oil so we didn't have to import oil, there will be short-term negative effects from rising oil prices.

Although the extra costs to consumers of rising oil prices will be offset by the higher returns earned by oil producers, there is still a painful adjustment that the economy must make to the change in relative prices.

Certain industries, such as the auto, trucking, airline, and transportation would bear the brunt of higher energy prices. Not only would these firms realize lower profits, but there would be a significant loss of jobs.

It's true that other industries, such as those involved in extracting, exploring, and conserving oil would see higher profits and likely seek out more workers. But it would take considerable time before all the workers laid off in, say, the auto industry to be absorbed by energy producers.

In the meantime, total output would slump and unemployment would rise. This adjustment means that the total cost of a sharp increase in oil prices is higher than the amount we pay to foreign producers. In short, the oil price shock could keep the economy growing at a snail's pace through the rest of the year.

What Can be Done?

For many of us, the use of oil is a necessity over which we have little choice. Nevertheless, we can minimize the impact of rising oil prices by taking shorter trips, using public transportation and carpooling, among others actions. In fact, Americans have already changed their behavior. The US Department of Transportation just reported that in the 12 months ending in March the number of miles driven has fallen for the first time in 25 years.

If oil prices continue to rise, I recommend that the government release some oil from its strategic reserve and perhaps raise the margin requirements on oil future markets to reduce speculation. I certainly do not blame speculators for the surge of oil prices, as I believe there are many fundamental forces at work raising energy prices. Nevertheless, such moves could break the inflationary psychology and warn speculators that the price of oil can go down as well as up.

Summary

The rise in oil prices has shocked Americans into realizing that fossil fuels are not unlimited. In the long run I am optimistic that conservation and alternative fuels will significantly blunt the impact of rising oil prices and not constrain economic growth. But getting to that long run will require painful adjustments in the short run and, to that end, higher energy prices may be a blessing in disguise.

Email this Page IM this StoryBookmark this StoryAdd to your Del.icio.us accountDigg this StoryPrint this Story

Rate This story

Very Good (617 Ratings)
3.5/5
Sign-in to rate!

177 Comments

Showing comments 6-35 of 177<< PreviousNext >>
Sort: first to last

  • Yahoo! Finance User - Friday, June 20, 2008, 9:23AM ET  Report Abuse

    • Overall: 5/5

    All this talk of drilling for more oil - c'mon. Listen to what Jeremy is saying; it's not just dependence on FOREIGN oil, it's dependence on OIL, period. If the government and industry had done what it said it was going to do in the 1970's - explore, invest in, and implement alternative energy sources - we'd not be in this pinch at all. But how soon we forgot - the oil and automotive industry influenced the american public that we had to have bigger and better, we bought into it (literally) and now we're screaming because we got what we wanted? How about change the paradigm? STOP with the call for drilling already - if we drill, then we'll have more in the short-term, but then we'll repeat the pattern again for our children and THEY will have to deal with our folly. The only way to get off of oil dependence is to change our dependence NOW. Conserve now and demand alternative sources now - solar, wind, nuclear. The nuclear industry has gone on quietly in this country and elsewhere, getting more and more efficient and safer. We've already got short- and medium-term solutions to the nuclear waste problem, we have efficient reactor design already, so built 'em and then there's electricity to run the transportation grid and other needs. It CAN be done, it HAS been done in other countries, and the sooner we start here, the better. Time to stop sinking money into outdated (aka fossil) fuels and look to the long-term future. Oil is no longer the answer, short or long term!

  • Yahoo! Finance User - Wednesday, June 18, 2008, 5:07AM ET  Report Abuse

    • Overall: 3/5

    all good arguments but until we find a viable renewable alternative, we are at the mercy of easy and cheap flow of oil. Now that india and china will not tolerate US monopoly on oil consumption, we need to face the realities and research in better and cheaper energy source. I think it will happen. Hopefylly sooner than later.

  • busy - Tuesday, June 17, 2008, 1:48PM ET  Report Abuse

    • Overall: 5/5

    Thanks for the economics lesson.

  • TOM - Thursday, June 12, 2008, 9:37PM ET  Report Abuse

    • Overall: 5/5

    Asking the US public to conserve does not work. Raising the price of their gasoline and heating oil and their food works. The end of oil is in sight. After that our world will change dramatically. A lot more dramatically than we are now enduring. The fact that we are now experiencing a relatively slow change will help prepare us for the BIG change coming. No one wants to hear this stuff. No one wants to give up using their SUV to get the mail or go for a pack of cigarettes. But the time is coming. The time is coming. Stop being fools. Start thinking rationally!

  • Cualquiera - Monday, June 9, 2008, 5:29PM ET  Report Abuse

    • Overall: 3/5

    I don't understand why no one ever talks about building our infraestructure. Cities are built with residential areas far from commercial. I'd like to hear of 1 person that lives within 3 blocks from a grocery store. How are we supposed to conserve oil when every service requires us to drive (and safe bike paths are a rarity in Las Vegas). Wind and Solar won't catch for quite some time. I've looked into it...at my current utility rates it would take me 10 years to brake even from the price of a 150watt wind generator. And solar is much more expensive. There is no train passenger service to Las Vegas...wow a city of almost 2 million and no Amtrak? The city has been built ala cheap with only tourism in mind (and irresponsible zoning to attract investors). When will we understand that our INFRASTRUCTURE has been built on cheap oil. Cities are not de-regulating public transportation and encouraging companies to invest in transportation systems. If cities are not doing the "easy" stuff, they certainly will not be investing in solar and wind. (they do invest in solar in wind just for political correctness, but not as a large percentage of the electricity that is produced.

  • frankt t - Monday, June 9, 2008, 2:52PM ET  Report Abuse

    • Overall: 4/5

    Enjoy reading your article Dr. Siegel. While we're on the subject of oil and energy, can you address the question as to why our leaders are not interested in investing in solar energy in your next month's article? If Germany can do it, why can't we? I live and work out here in the western states, namely California, Arizona, and Nevada, These states have plenty of open space and lots sunshine year round. Wouldn't it make sense to harness some of this sunlit energy through the use of solar-panel farms?

  • Yahoo! Finance User - Sunday, June 8, 2008, 5:31PM ET  Report Abuse

    • Overall: 5/5

    There's absolutely nothing that can be done about the oil crisis. Even if the United States dropped oil consumption by 20%, the Chinese and other developing countries will consume that 20% and prices will stay the same. There is no other direction but UP for oil prices. Many are predicting $150.00 per barrel. I think by December we'll be at $200.00 per barrel and by next summer $250.00 per barrel. There are key fundamentals that will back these claims. Demand of oil among developing countries such as India and China and the other is the ever dropping US Dollar.

  • JohnG - Sunday, June 8, 2008, 5:27PM ET  Report Abuse

    • Overall: 2/5

    the oil futures market is being manipulated in order to panic Congress into opening federally protected lands for rape and development .

  • Yahoo! Finance User - Sunday, June 8, 2008, 11:47AM ET  Report Abuse

    • Overall: 5/5

    Very good perspective. Total increase approximates a year's growth. Tough but not devastating.

  • Yahoo! Finance User - Sunday, June 8, 2008, 2:17AM ET  Report Abuse

    • Overall: 5/5

    I rated this article as excellent because it does recogniize that fosil fuels are not the solution to our energy problems. I wish the article had mentioned the economic powerhouse for US of moving our economy to solar (PV and thermosolar) and wind. Plug-in hybrids will be the way to gradually converting our transportation to electricity-based. This wil not make the price of energy cheaper in the short term, but yes in long term. But, something that will start doing from day one is reducing our trade deficit, and create leading industries on batteries and energy conservation. - Green

  • Yahoo! Finance User - Saturday, June 7, 2008, 11:20PM ET  Report Abuse

    • Overall: 5/5

    flood the market with oil gas and diesel then the price will come down how , we have trillions of barrels of oil in oilshale in colo. utah wyo on federal land congress can open it up for developement by the oil industrey we have coal turn it into liquid for diesel build nuclear power plants flood the market with electric that will bring on the electric car we have enough uranium to supply the world these ideas will create jobs keep our dollar here in this country where it will be king again and the worlds reserve currency

  • Rambo - Saturday, June 7, 2008, 6:21PM ET  Report Abuse

    • Overall: 2/5

    Anyone can come up with these articles with some basic research or analysis. Why don't you start writing the solutions to fix these problems? or you leave it on luck or depend on next president to fix it. This once great country has turned into a land of losers from land of opportunity. Here how we can fix this country... 1. Start Oil exploration in Alaska immediately . This will reduce the pressure on oil. Believe me environmentalists are losers . They are getting paid by Saudi Govt or China. 2. Come out of Iraq immediately and tell them to continuously supply free oil for USA as IRAQ needs to pay for the cost of the war. 3. Open up immigration for those people willing to invest in USA housing stock - can have different ranges for different regions. This will immediately put some life in housing market. 4. No tax upto $100,000 in income for next 5 years if a couple produces a kid. 5. Open up nuclear plants , run as semi govt entities on a non-profit basis, as many as we need to give cheapest supply of electricity to US people. Build new railway lines, trams if needed across the country to run everything of electricity . 6. Increase patent protection for drugs from 20 years to 40 years to give incentive to drug companies so that they can reduce the price of drugs by half. This will give them enough time to come up with new drugs as well. 7. Build govt sponsored education institutions to mass produce doctors, surgeons and dentists to bring down the cost of health care or open up easy immigration for medical professionals. These newly immigrated medical professionals will need to work for cheap and for atleast 5 years in govt owned hospitals.

  • Yahoo! Finance User - Saturday, June 7, 2008, 9:40AM ET  Report Abuse

    • Overall: 2/5

    the US is shipping oil drilling components around the globe so that other countries can drill for oil and sell it back to the USA at a FANTASTIC profit, and we sit and watch the politicians talk about "change". All the while they are leading us down the path to extinction. The Government is incapable of change by the definition. - Government: the organization, machinery, or agency through which a political unit exercises authority and performs functions and which is usually classified according to the distribution of power within it. Government exists to perpetuate their own rule, and exact control on the populous to maintain the status quo….. “control”. Control does not equal Change !!! Take the power back. Don’t vote for a party, politician, or a slogan. At this point, Don’t even vote. Any and all of the “candidates” are going to perpetuate and expand government, and enhance their political position of power. If they have to give us something to keep that going they will, but not until they have to! Make them Irrelevant. Throughout history, Major change has come from Natural Disaster, War, or profit. Not Government legislation. That always comes after the fact. The Roman and British Empire didn’t expand to cover most of the known world to educate the masses and reduce our carbon footprint. The generals and profiteers weren’t waving signs about change and Green initiatives. They were out there changing it or killing those who got in their way. They did it, and the government followed along bickering and trying to control what the army left in its wake. After the fact. I’ve been to New Orleans and seen the locals pulling themselves up by their own strength while the government pisses away time and money STILL trying to decide what to do. Talk to Chef Leah Chase in New Orleans and see how much change an 85 year old woman can do. She did it herself. She didn’t pray for someone to come. She prayed for the strength to do it herself! And then got up and walked across the street and re-opened her restaurant FIRST, then figured out where to rebuild her house! Last I knew, she was still cooking all day, and wasn’t planning on going home anyway! “The neighborhood needed me”, she said! She’s God’s FINEST! Innovation and the Free market is the true impetus of change. If there is a profit to be made, or a TRUE danger to our way of life, people will change it by necessity LONG before the impotent talking heads in Washington give up their cash cow to legislate a "change". What did government ever invent??? People invent. “Change”, prints well on a sign to hold up at a rally, but when you elect the genetic clone of the previous politician, you get the same thing… another politician. If we want to CHANGE the way we do things, tell the hunters to go to Alaska, and shoot the moose, bears and seals to feed the kids in Dafur, drill some holes in the snow and start pumping. 2 problems solved. Next, we go off the coast of Florida chop up the manatees and protected fish for a nice seafood salad and suck the sea bed dry of oil before Cuba and China get it all. The coast of Louisiana is packed with oil refineries. Isn’t it more energy efficient to pipe it a couple miles from the gulf to there, instead of around the world by ship to the same refinery??? In the mean time, take back the subsidies we gave to the corn producers for ethanol (JOKE) and return the $ to the taxpayers. Get real people! “We the people” need to do this, not kneel at the altar of congress and pray for a miracle. They can’t give us a miracle. They should be watching as we perform that miracle and if the government decides to follow after the real work is done, so be it. Let them form a committee to investigate it after it’s done. Isn’t that what they usually do when they never saw it coming, and didn’t plan ahead?!?! They talk about what happened, after it’s over? Make a change, Don’t wave a political sign that says CHANGE.

  • Crazy Horse - Saturday, June 7, 2008, 3:34AM ET  Report Abuse

    • Overall: 4/5

    I wish you Dems would Quit blaming Bush for this! DEMOCRATIC CONGRESS is more to blam then anyone!! We desperately need a NEW refinery, and to drill domestically but congress/envrironmentalists wont allow this. Action needs to be done. China, India, Cuba are ALL drilling and exploring new areas to drill for oil, and we are sitting here while they laugh at us. I agree nuclear, alternative fuels in the LONG term, but we need a "DRILL HERE DRILL NOW" approach. Bush has been trying to get support for that for months, but congress has other ideas. When will they learn? Maybe thats why they're approval rating is as low as his.

  • Yahoo! Finance User - Saturday, June 7, 2008, 12:38AM ET  Report Abuse

    • Overall: 4/5

    I like the idea of establishing a fuel price floor, but surplus funds generated at lower fuel prices should be funneled directly into research to improve the efficiency of energy generation (solar, wind, etc.), storage (less electric transmission loss, greater recapture during braking), and use (mass transit, hybrid technology). Allow no diversions to fund Social Security shortfalls, health care reforms, Homeland Security, or Iraq. A fundamental policy shift will do more than anything else to reduce future demand and current prices.

  • Yahoo! Finance User - Friday, June 6, 2008, 11:48AM ET  Report Abuse

    • Overall: 4/5

    This is why we need to get green... and by green I mean nuclear. Carbon footprint = 0. Increase this country's power capacity with nuclear and we could all be running electric cars. I can see why Iran would want nuclear power so bad...

  • Yahoo! Finance User - Friday, June 6, 2008, 1:50AM ET  Report Abuse

    • Overall: 3/5

    I really could care less about oil prices. I believe that if you could inject calm into the market and deflate the 'hype' surrounding gasoline prices that oil would settle quickly to the 90-100 dollar a barrel range. The real shame is the Bush Administration coupled with an election year have left the country lacking a strong capable leader whose voice carries any weight. A solid leader would be able to apply pressure political and economic to put an end to the hype of oil prices. My start would be to haul up every single commodities trader on the exchange and supeana every record from every finiancial firm and put there feet to the flame and put the fear of god into these people. See if you cannot nail them. I'd also raise the margin requirements on commodities by 10%. See if you cannot catch people leveraged.

  • Yahoo! Finance User - Thursday, June 5, 2008, 11:41PM ET  Report Abuse

    • Overall: 2/5

    Drill,Drill,DRILL!

  • Andy - Thursday, June 5, 2008, 11:11PM ET  Report Abuse

    • Overall: 1/5

    there is estimated to be about 130 billion barrels of oil available for drilling in the US, (ANWAR, gulf, SD, ND) about 80% is on Federal land. The dems and enviro wackos obstruct any drilling or building additional refiniers (and nuclear) but continue to blame evil oil companies. Fact: the government make about 6 times more on a gallon of gas (via taxes) than the oil companies. THis is a supply issue the they have created. We can conserve all we want, but what we conserve, CHina, India and other developing countries will gladly buy. Ethanol is not the answer, as it costs more and uses just as much fule to produce. CONGRESS and the ENVIRONMENTALIST have created this crisis to manipulate our behavior and control our lives. Don't buy into the lie. Tell your senators and reps to DRILL, REFINE and EXPLORE!!

  • Daniel - Thursday, June 5, 2008, 10:22PM ET  Report Abuse

    • Overall: 4/5

    Electric cars are not yet here because in the late '90's, oil prices fell to an inflation-adjusted all-time low, so the market went to SUV's and away from alternatives such as electric cars. Manufacturers build what the market will buy. I work in a car dealership, and at $4.00 per gallon, consumers are FINALLY beginning to adjust their buying and driving habits. The best thing that the U.S. government could do would be to put a price floor of $4.00 per gallon of gas so that the market would keep moving toward shorter commutes, fewer unnecessary trips, more fuel-efficient vehicles, etc.

  • Yahoo! Finance User - Thursday, June 5, 2008, 8:25PM ET  Report Abuse

    • Overall: 1/5

    Drill more, pump more and refine more. Act now and impact the futures madness. Build 200 more nuclear power plants to be online by 2020 for our energy independence.

  • Amfil - Thursday, June 5, 2008, 7:49PM ET  Report Abuse

    • Overall: 5/5

    Ten years ago, i had hoped I'd be driving an electric car by now, what slowed the development of electric cars?

  • joseph - Thursday, June 5, 2008, 3:44PM ET  Report Abuse

    • Overall: 5/5

    We are all struggling to understand the complete picture of oil as an extracted & refined consumable commondity. We want to know more about the forces driving the prices. Particularly as they relate to our economy and market place. This is a good start. Keep it comming.

  • Screw Obama he is a thug and a gangster. - Thursday, June 5, 2008, 3:43PM ET  Report Abuse

    • Overall: 3/5

    Oil is here for at least a few more generations... to grow up with, and use. Why we don't build more refineries is something the tree huggers need to explain. We can drill all we want, but without refineries, we're spinning our wheels. Estimates of how much we have or don't have is a joke... knowbody REALLY knows... and anyone telling you different is full of bull. We have alot of untapped oil, how much?... who knows. The point is, we'll probably move away from oil, but it won't be a complete move within the next 30 years, so build more refineries, and drill more... it's that simple.

  • Yahoo! Finance User - Thursday, June 5, 2008, 2:30AM ET  Report Abuse

    • Overall: 5/5

    Armies march on oil. The US has a lot of oil and may very well need it.

  • Yahoo! Finance User - Thursday, June 5, 2008, 1:10AM ET  Report Abuse

    • Overall: 3/5

    I say keep the oil in the ground in Alaska. If you think $4.00 a gallon is bad now, how are you going to feel about $40.00 a gallon in another 10 years? Let the Arabs use up their oil while it is still relatively cheap. America needs its reserves to fall back on when everyone else is tapped out.

  • Yahoo! Finance User - Thursday, June 5, 2008, 1:06AM ET  Report Abuse

    • Overall: 2/5

    Oil is a limited commodity, and current supply cannot keep up with demand. Just this past week, Indonesia gave up its OPEC membership. Why?... Because they are now a net IMPORTER of oil. Mexico provides roughly 14% of US oil imports. Their output has been declining, and there are estimates that they will be completely DONE in 2014. The US is not prepared for that size of a reduction in imports. Oil is down today, but this drop won't last very long. We should be drilling for more off of our coasts and in Alaska.

  • Yahoo! Finance User - Wednesday, June 4, 2008, 10:25PM ET  Report Abuse

    • Overall: 5/5

    (Democratic led) Congress has a lower approval rating than the unpopular President Bush. If only the sappy tree hugers would allow us to Drill OUR own oil, we won't be giving Petrodollars to shabby governments. We have 50 years worth of oil in our own country at current consuption rates that is doing nothing sitting in the ground. What I don't understand is that they feel they are doing an enviornmental jusdice by protecting " our" enviornment by not drilling, but they think it is ok for other countries to mess up " their" enviornment?

  • Yahoo! Finance User - Wednesday, June 4, 2008, 6:42PM ET  Report Abuse

    • Overall: 3/5

    The consumer has won this week. Oil prices have fallen 10% this week. Because of our cutbacks, by us the consumer, oil prices has been plummeting and probably after a minor rise in gasoline prices, gasoline will start to plummet also if we keep cutting down our driving for a while. Supplies will rise so high that panic will hit the speculators. It's working keep it up!!!!!!!! Oil is less than $124 a barrel today.

  • Yahoo! Finance User - Wednesday, June 4, 2008, 3:58PM ET  Report Abuse

    • Overall: 3/5

    I can't figure out the reasoning that we shouldn't drill in Alaska because it would only bring in 1 million barrels a day. Thats 365 million a year and except in the minds of wackos, that a lot. If we used this analogy every time we went to drill anywhere we would never pump any oil. Pump a million here and a million there and pretty soon you have a lot of oil. Just as we wrongly blame the oil compies for our current predicament, we wrongly blame the auto companies for lack of gas mileage. Not only do the environmentalists stop us from drilling, they also push for tighter emission standards which mean less gas mileage. Back in the 1980's and into the 90's cars got better mileage than today and that was mainly with clunky inefficient carburators and inefficient aerodynamics. Some of the small cars would get around 60 to the gallon. Todays micro cars get 40. If you took the Ford Taurus with the base engine and compared the mileage ratings for the last 10 to 12 years you would see the ratings drop as years went by due to tightening emission standards. All because of emissions. Right now my wife and I have the same cars with the same drivetrains and I get much better mileage than she does because mine is 4 years older and subject to lesser emmisions. With the wackies and their bs about global warming, they will be pushing for ever tighter standards which means it's going to be tough for carmakers to increase mileage. I figure the car of tomorrow, after the wackies get their way, will be a cardboard box with a sail on it. Of course Al gore will still be driving his gas hog Lincoln. Speaking of Al, he got ahold of $300 million to be used in an advertising campaign to "educate" us on global warming. Now wouldn't it be better to spend that money on research instead of making Madison Avenue execs and TV stations rich? If we took all the money the wackies spend on lobbying, advertising, protest rallies, and such, we would have a huge pool of research money. But of course they can't do that because it's so much easier to protest and much more ego fulfilling to hold a news conference or head a protest than to get a real job. Those who can do, those who can't call a press conference.

Showing comments 6-35 of 177<< PreviousNext >>
The columns, articles, message board posts and any other features provided on Yahoo! Finance are provided for personal finance and investment information and are not to be construed as investment advice. Under no circumstances does the information in this content represent a recommendation to buy, sell or hold any security. The views and opinions expressed in an article or column are the author's own and not necessarily those of Yahoo! and there is no implied endorsement by Yahoo! of any advice or trading strategy.

More From Jeremy Siegel

What's happening in the economy? And how will that impact your portfolio?

Find out what Wharton Professor Jeremy Siegel says.

Have his timely newsletter sent by email each week and be the first to learn what's moving the markets and why.

Subscribe now at www.JeremySiegel.com

More from Yahoo! Sources

  • CNN Money
  • Consumer Reports
  • Kiplinger
  • The Motley Fool
  • Business Week
  • Wall Street Journal

Historical chart data and daily updates provided by Commodity Systems, Inc. (CSI). International historical chart data and daily updates provided by Morningstar, Inc. Fundamental company data provided by Capital IQ. Quotes and other information supplied by independent providers identified on the Yahoo! Finance partner page. Quotes are updated automatically, but will be turned off after 25 minutes of inactivity. Quotes are delayed at least 15 minutes. Real-Time continuous streaming quotes are available through our premium service. You may turn streaming quotes on or off. All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.

Yahoo! Answers is provided for informational purposes only, and no Q&A is intended for trading or investing purposes. Yahoo! shall not be responsible or liable for the accuracy, usefulness or availability of any Q&A information, and shall not be responsible or liable for any trading or investment decisions based on such information. View Complete Answers Disclaimer.