The market surged on opening after the holidays. That was a big "duh." Now, we're facing the tail end of the post-holiday re-investment rally and we're once again shrugging our shoulders. Where do we place our investment dollars, and how quickly do we need to act? Do we take the plunge and hope the water isn't so cold it stops our hearts?

The water may be just fine for durable consumer goods, especially if we plunge on the belief that our domestic dollar will continue to fall. Let's take a good look at some investment goodies in this sector and how they might affect our incomes over the next year.

Durable consumer goods consist mostly of appliances, home furnishings, housewares, lawn and garden equipment, small tools, electronics, toy and sporting goods, photographic equipment, jewelry, and office furniture and fixtures.

Let's be aware on the front end that durable consumer goods couldn't exist without industry. Manufacturing is the birthplace of our fondest consumer desires. Add a little technology, and you have a wealth of new innovations that often end up on sale during post-holiday seasons. This makes durables seasonal, and also makes your purchase a bit out of date within two to five years. Durable, therefore, depends on our thirst for new goods.

"Durable" as an adjective is also subjective. Sentimental value doesn't have a price tag. We might hold onto that diamond bracelet forever, whether diamonds are up or down. File cabinets and golf clubs might last forever, too - but not out of sentiment. They just seem to gather dust until a major house sweep sends them to the Salvation Army or a yard sale. However, lawn mowers, home entertainment goodies, and refrigerators tend to beg replacement when new models hit the market or as they wear and tear with use.

History plays a huge part in psychological reactions to durable goods. Stressful situations - such as threats of war and economic downturns - affect how much we invest in markets and goods across the board. It would be difficult to forget history with current news on the falling American dollar. Normally, a drop in the dollar might bring on anxiety attacks; however, the adage that every cloud has a silver lining might pertain to your portfolio and your longing for that wide-screen TV.

Economics 101 plays this scene out for us. As the dollar slides in a weak economy, companies tend to keep slashing prices in consumer goods just to meet costs. The consumer wins on automobiles, home electronics, and other manufactured goods - but only if we act quickly. As the dollar continues to slide, companies usually find a ruse in the weak economy to maintain current prices or raise them to new levels. This seems especially true for products that haven't found a comparative price bracket. Among these items are those fairly new to consumer markets, like home robots and wide-screen televisions.

Say you took the kids to a movie over the holidays. To your dismay, many other children attended the same movie without parents. You were surrounded by noise, minor chaos, and major disturbance. This scenario was topped by a visit to the theater manager after the movie, where you complained about lack of supervision. The manager regarded you as a visitor from Mars, and you realize his bottom line is much more important to him than your enjoyment. You also realize if you avoid the theater over the next year you might save enough to purchase a wide-screen television. This decision places you in the position of "consumer lust."

You begin to price wide-screen TVs, and you realize price ranges are vastly disparate. A difference of one inch in width might mean the difference of $1,000. If you purchase the TV in a mall as opposed to a store that offers huge warehouse discounts, you'll also see a huge price discrepancy.

This price confusion will probably last as long as the dollar keeps sliding. The best action - according to current investment advice - is to jump into that purchase, as the price probably won't drop over the next year and may even rise if the economy doesn't rebound.

If you're not in the market to purchase durable consumer goods, then it's time to watch companies that manufacture them. If the economy rebounds, these equities may be very promising (and the price of that TV may fall in response). A combination of more money to spend and low prices focused to move merchandise off shelves will help sales expectations. This could mean a huge boost to our portfolios, too.

On the other hand, we may have another year like last year?in which case prices in durable consumer equities may see another drop. What's an investor to do? Current advice from experts includes the push for foreign investments and deposits in savings accounts and certificates of deposit denominated in foreign currency. I'm sorry, but that seems a bit too short-term and confusing for me. I'd rather listen to President Bush's new proposal to eliminate taxes on dividends.

The Wall St. Journal indicates Bush's proposal means a capital gains cut if we read between the lines. I'm reminded of similar thoughts contained in flat tax proposals, so I'm all ears. If you're skittish about investments in domestic dividend-paying companies, just keep an eye on what will happen to these equities over the next few months. You may see them rise on the promise of tax slashing until Congress makes a decision. As long as the proposal stays in negotiation, there's always hope President Bush's ideas will succeed.

We can also see public response to stress in action today with productions of upcoming Super Bowl advertisements. The ads are mostly for services, durable consumer goods (and advice from their public relations departments), and recreation and leisure. The advertisers are going for humor - perhaps as a direct response to war threats in Iraq and domestic dollar deflation. Next week we'll look at current market psychology and its impact on short-term consumer goods. That topic alone might be good for a laugh or two, especially if we find some investment gems.

Until then,
Linda Goin