I have been traveling so unaware of any local flyers as to exactly what time the sales will begin the day after Thanksgiving, but I’m guessing it’ll be midnight this year. I’ve always thought Black Friday sounded too racist, so I prefer to call it Friday Fire Sales instead. You see, in addition to the generally accepted meaning of fire sales, we’ve been burnt this year in the stock and bond markets such that retailers are going to HAVE to induce us with some pretty special savings. What will it take to rouse you out of a deep sleep,haul yourself into your car and for those of use living in cold weather states, possibly have to clean the frost or snow off that same car, and elbow your way into a store or two? Discounts of 30%? Discounts of 40%? How about 50%? Now THAT’S a real bargain by anyone’s standards.
Yet if I invited you to consider buying into some stock mutual funds now, you would probably not take the same view, correct? Yet, I’ve always said that investing involves common sense, and common sense would say that a heavy discount of a quality item is usually an invitation to buy, in anticipation of gaining terrific value without having to pony up a retail (or even wholesale in some cases) price.
They don’t ring a bell at the bottom of the stock market, nor do they ring a bell at the peak. So, unlike retailers, who advertise their sale days and the exact % off (in advance) with glossy mailers, the stock market doesn’t advertise to the masses or event a select few, but rather gallops along, available for purchase at any time. And hint, hint, wink, wink, the stock market is on a HUGE fire sale right now!
Obviously the combination of buyers and sellers is what makes the market–when one person thinks it’s a great time to buy, another will be equally convinced it’s a great time to sell. So, now in the midst of heavy selling, and some panic selling, I invite you to ask yourself, are you one who prefers to pay retail or wholesale prices? Or are you one to take advantage of a real fire sale?
If you have extra money that you can comfortably afford to invest for 3-7 years, there has not been a time like this to buy in many a year. Will the market go lower? Perhaps. Will the market improve such that you “feel” more comfortable investing? Perhaps, yet statistics abound about how much investors lose out on by waiting too long to buy, and it’s a sizeable percentage indeed! Remember the age old advice, buy LOW, sell HIGH!
So, rather than wade in by buying individual stocks, I recommend the purchase of no-load mutual funds–a collection of stocks–to mitigate some single stock risk. In other words, why “pick” a stock now, when so much changing news could adversely affect your whole investment; i.e., single stock–hey who thought Lehman Brothers would now be dust just 4 months ago? I mean if this whole financial meltdown caught Alan Greenspan by surprise who are we to wax eloquent on matters financial. Nothing saying you can’t buy a little at a time over the next several weeks and months either, utilizing dollar cost averaging.
As you stand in those long lines then this Friday, remember that you may make some of your wisest purchases this holiday season from the comfort of your home, dialing your financial planner or broker, or placing the trade(s) into the stock market yourself.
HAPPY TURKEY DAY!