Thanksgiving ended approximately five minutes ago, so the Christmas market is already in full swing. Some economists speculate that increased spending during the holiday season will help further economic recovery, while others predict consumers will either limit their expenditures or just wind up further in debt.
No matter the outcome, today (beginning as early as 3am at your nearest department store), marks the frantic beginning of many industries’ most important month. Holidays hold the distinct power to sway a company into or out of financial trouble, which by extension means that the holidays are an important time to be observing stock market trends.
A few good signs point in favor of shares increasing this year. First, Black Friday spending is expected to increase 3% from 2009. Stores are opening even earlier than usual, and a variety of sales and bargains already kicked off earlier this week. And after the shopping slump that permeated the past two years, firms are eager as ever to offer outstanding online deals (sometimes partnered with free or reduced shipping and handling fees).
These clues all suggest economic stimulation and hopeful expansion of the online market, which increasingly attracts consumers desperate to avoid clothing rack wars and absurd mile-long lines.
In addition, price cuts for TV screens, computers, and various other gizmos will draw a large crowd this holiday season (especially considering the soaring popularity of electronics—the typical dream gift these days is an iPod or a laptop). The technology surge pushes many investors to focus on Apple, Microsoft, and companies of that sort.
But these investors might be missing out on two other pivotal markets: the family superstores that sell these products in bulk and the aforementioned online services that offer unmatched discounts. Walmart, Target, Macy’s, and Amazon.com should not be overlooked; they have more potential to gain from Black Friday than nearly anyone else.
Investing during the holidays, of course, may prove tricky. Some stocks will plummet during the aftermath of a short, festive spurt in consumer spending and others will perhaps stabilize. Keep a watchful eye on the market and explore your options carefully.
Lastly and most importantly, try not to deplete all of your income just because you can’t resist a good bargain. Regardless of sales tactics, quality generally tends to decrease with price. Rule of thumb: if that shiny remote control toothbrush is too cheap to be true, either it’s made of junk or the manufacturer is going out of business. These days the latter is more and more likely.
And on that cheerful note, happy spending and happy holidays! The two are synonymous, no?
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