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Shopping Small, Saving Bigger, and Investing Longer
Linda Goin

Black Friday is disgusting. There, I said it. It happens to be the most sickening display of consumerism I've ever experienced in my life. Yes, I did it once, but realized during that one Black Friday session that I was contributing to landfills with cheap merchandise that wouldn't last a year. Plus, I became part of the reason why retail shop employees weren't at home with their families.

Now, Black Friday is creeping into Thanksgiving Thursday, rather than extending through the weekend. While I don't honor Thanksgiving except as a day off, I still don't appreciate commercial intrusion into my life. Additionally, I'm increasingly chilled by shoppers' behaviors. According to Wikipedia, the violence over the past two years during Black Friday includes shotgun wounds, trampling injuries, stabbings, pepper spray injuries (caused by another shopper), muggings, and fights over items such as $1.88 bath towels and yoga pants. Really? Fighting over yoga pants?

Are you kidding me, people? I know things are rough right now for a lot of folks. But, why spend even $2 on a waffle maker? How many waffles do you make in one year, anyway? How long does a $2 waffle maker last?

While this type of violence might make a sane person avoid Black Friday, ShopperTrak, a Chicago-based firm, said sales were up 6.6 percent to $11.4 billion, and customer counts climbed 5.1 for the shopping day after Thanksgiving. However, on the Saturday after Thanksgiving, sales fell 4 percent in the 25,000 stores nationwide that ShopperTrak follows.

I'm guessing that ShopperTrak doesn't follow independent retailers, or those mom-and-pop shops that usually take up historic buildings on any given town's Main Street. But, the National Retail Federation might...and they say that Americans spent $52.4 billion online and in stores over the four-day weekend, 11 percent more than last year.

Finally, Cyber Monday – a day set aside for online sales – hit $1.25 billion to rank as the heaviest online spending day in history. But, folks who carried smart phones were the ones who were copping all the deals, using apps to find coupons, better prices and last-minute sales. One report stated that the uber-rich and upper-middle class were the spenders – although I cannot, for the life of me, imagine Bill Gates or Warren Buffet in a Black Friday brawling atmosphere. And, I don't have to imagine this scenario, as those folks probably sent their help out to purchase items at high-end stores (which showed better sales than low-end stores).

If you're wondering how anyone can afford to buy gifts this holiday season, don't worry too much. The numbers vary according to surveys, but between 44 percent and 60 percent of Thanksgiving weekend shoppers were taking advantage of sales for personal use. People have been scrimping all year to buy up during these mega-sales – but what were they buying?

According to the Federal Bureau of Investigation, Black Friday was the time to buy guns. They show an all-time one-day high for background check requests from gun buyers, with 129,166 requests to the National Instant Criminal Background Check System (NICS) – a third more than the previous record of 97,848 on Black Friday 2008, FBI spokesman Stephen Fischer said. On Black Friday last year, there were 87,061 requests.

With the inability to purchase weapons online, Cyber Monday pulled interest from shoppers who sought everything digital and technical, but mostly tablets, such as readers and flat-screen smaller-than-laptop Internet connectivity tools.

There's something vaguely sinister about all this information: Upper-end shops did better than low end shops, but it's doubtful that high-end retailers carry guns or digital tablets (which are ubiquitous). People mostly purchased items for themselves, which means at least 129,166 of those folks bought guns and many more fought over cheap towels and waffle irons. It makes me wonder what type of revolution is broiling from these purchases.

Undoubtedly, our country is filled with diverse consumers who spent money like their lives depended on it. Meanwhile, the Dow Jones dumped, only to surge into the black at the first of December, and – barring any overly negative news from Europe – economist Bill Hampel predicts a boost in consumer and business spending in the next few months. Since the richest people in this country probably don't read this column, I'm addressing the next sentence to those who entered the Thanksgiving weekend spend-a-thons:

What the heck are you doing?

Why are you spending money on items that are worthless (or potentially deadly) when you can invest in a market that is slowly showing signs of recovery? December traditionally is one of the best months for stocks. Since 1950, the Dow has risen an average of 1.7 percent during December, while past performance is no guarantee of future results, that's about two times better than the average for the rest of the year, according to the Stock Trader's Almanac. Additionally, the Nasdaq rose 7.6 percent this past week, while the S&P rose 7.4 percent.

Now that you've blown the wad on a gun, some towels, a digital tablet, yoga pants and a waffle iron, how much do you have left to follow the investors into the market for an upside holiday market season? If you had invested $500 in the market at a rate of 7.4 percent (tell me which bank is paying that much interest?), you could walk away with $37 – enough money for 18 waffle irons.

But, the point is not how much you can make in a month or a week. The points are to shop small (meaning independent merchants who are your neighbors and who are struggling as well), to save big and to become a long-term investor who can reap benefits from a venue that has, historically, paid off better than any other investment tool.

Every once in a while you might want to dip your toes into a Black Friday foray or the Cyber Monday madness; but, like my daughter says, “I don't make it a habit.” It's all about choices, and if you had all year to think about what you were going to buy on Black Friday, I have to wonder why it was that darn $2 waffle iron. Register to open a portfolio today at BUYandHOLD, and learn by December 2012 what it might feel like to own something that doesn't contribute to landfills.

Until Later,
Linda Goin


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