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Stock Investments for the Holidays

Investing in the stock market during the holidays can be a great way to get bargain prices on brand name stocks. Trading volume and volatility of the stock market tends to be minimal during the holidays, resulting in slightly depressed stock prices. Investors are skeptical about how companies are going to wrap up their fiscal year and if they have enough time left to meet the expectations of the financial analysts.

So how can the individual investor benefit from purchasing stocks during the holiday time frame, which is characterized between Thanksgiving and Christmas? Below are some tips and suggestions.

  1. Look for large retail stocks. The retail industry is always at question during this time as consumer spending trends are scrutinized on a daily basis.   Watch for retail stocks that have a slightly negative trend.  This could suggest investors are worried that the retail company may not meet their year end number, however this is rarely the case for big box retailers.
  2. Pay attention to hot items, such as that “must have” kids toy, or tech gadget that is flying off the shelf.  Note the company that makes the product and purchase the stock on a dip in price.  Once January roles around, you will be happy you spent the time researching what items are flying off shelves for Christmas time.
  3. Check out service industry sectors that have increased revenue during this time of year.  For example, if temperatures are colder than normal for these winter months, you can expect a spike in natural gas, coal, and electric consumption.  Stocks associated with increases in use of these natural resources can provide you a nice healthy return if you can purchase them on a dip before the consumption trends are realized.

Above are just a few simply suggestions of how to purchase solid stocks at reduced prices which can potentially deliver great returns over the years to come.  Sometimes all it takes is a little attention to what consumers are doing and products they are purchasing.

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