It’s the hot topic everyone wants to talk about in 2026.
I certainly get it, because oil prices affect us all. I know it takes a lot more money to fill up my tank today than it did just a few short weeks ago.
It’s worth taking a closer look at exactly what’s going on with gas prices.
Gas prices not only affect our pocketbooks but also our moods.
A recent Wall Street Journal article highlights the research that found a link between gas prices and our moods:
Economists have found that round-number prices for retail items are salient to consumers. A 2010 Brookings Institution paper found people were unhappier on days when gasoline rose above $3.50 and $4.00 a gallon.
I certainly can’t explain the exact neurological relationship between what we pay at the pump and our moods, but they do.
Perhaps it’s frustration with the whole gas price cycle:
When oil prices rise quickly, gas prices rise just as quickly.
When oil prices drop quickly, gas prices drop slowly.
No wonder the frustration from oil prices weighs heavily on our moods.
Consumers haven’t been wrong about feeling a little lighter in their pocketbooks:
Yet, as I always do, I wonder whether the mainstream media is framing its gas price narrative in the right context.
The prevailing narrative is that this recent spike in gas prices is “the largest in history,” but here’s the thing: when you cite history, you should probably actually check history. Of course, they don’t because it doesn’t fit into their narrative.
They are either intentionally trying to mislead us, or they’ve conveniently developed amnesia about 1973. When the world price of oil effectively quadrupled in five months following the October 1973 embargo.
Remember waiting in line to purchase gas back then? I do.
My dad would come home from work, drive to the station, only to wait for what seemed like hours, to fill up.
They also failed to mention what happened with gas prices in 1979, when they more than doubled following the Iranian revolution.
And you can forget about the media mentioning that consumers have been spending less on energy (including gas prices) as a percentage of their disposable income for years now:
Good luck finding that little nugget of truth in their narrative.
Never mind that the US, in just the last 26 years, has gone from being a huge and quite desperate importer of oil to being the world’s largest producer of it.
A reasonably intelligent person would think that might have been a rather important point to make when discussing the impact of geopolitical events on gas prices, wouldn't they?
And yet, no mention anywhere.
Instead, we get garbage like this:
Unfortunately, neither I nor anyone else can claim to know when oil prices will fall.
That’s not the point.
Your job as a goal-focused, plan-driven, long-term investor is to follow your asset allocation, which has been dictated by your plan.
History has taught me that whenever and under whatever circumstances global oil flows are normalized (and/or new and more secure routes are established), prices will migrate toward their pre-crisis levels, just as they did right after the 1970’s oil shock.
It is IMPOSSIBLE to predict when that will happen.
And more importantly, it is irrelevant to our investment policy. If the equity markets seem not to care about oil prices (and it’s clear they don’t), why should you?
It’s a fool’s errand to make financial planning decisions based on ANY geopolitical crises (real or imaginary). Many have tried, and most have failed.
Instead, let’s use this latest crisis du jour as a reminder to focus on what WE can control, rather than worry about what we can’t.
The important things are how much you save, your asset allocation, your time horizon, and your risk profile. These things will have a greater impact on your investment results than any price you may pay at the pump.
It may help to lighten our moods to complain to friends, neighbors, and co-workers about rising gas prices, but in the context of your financial plan, it’s not going to move the needle.
Stay the course, my friends.