For years the market has been gauged using Black Friday as a thermometer to see how “hot” the last quarter of the year will be. Recently another gauge has come on the horizon to measure the temperature of the 4th quarter and feel the mood of consumers. It is called Cyber Monday and it falls on the Monday following Thanksgiving. Cyber Monday is revealing significant internet profit increases because consumers are still searching for online deals and markdowns, after their long weekend of traditional shopping.
At the week’s end on Saturday, statistics were showing a 2.5% increase in U.S. brick and mortar retail stores and an increase of 10% for online visits on Black Friday. Cyber Monday, however, showed an increase of 21% over the same day last year and translates to a dollar amount of $733 million. According to the National Retail Federation and the International Council of Shopping Centers, October through December accounts for a large portion of retailer’s annual profits; up to one-third in some cases.
Be warned! Robert Hsu, Editor of China Strategy says not to focus primarily on this momentary trend when it comes to investing. He states that the market can fluctuate based on just a whim and not an actual, concrete change. Look at a pilot program in China as an example. Earlier this year, the Chinese government decided to allow some of China’s investors to directly purchase Hong Kong H-shares. Investors got excited, the market went up, but the government revoked the policy, stating that they needed to do further research on its effects. So, it boils down to remaining cautious while investing because none of these are sustainable, long-term trends. It’s ok to stay with your current holdings if you prefer, but Mr. Hsu suggests picking up extra short-term shares to give yourself a nice holiday bonus.
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