The National Retail Federation (NRF) has reported that while the number of people who went shopping on the weekend after Thanksgiving increased by 2 million, the amount that they spent on average dropped 3 percent compared to 2012. This is the first decline in Thanksgiving holiday weekend spending since 2009.
This reduction of sales revenue is somewhat surprising given that many retailers including Macy's and Target skipped the idea of Black Friday altogether and allowed customers to begin their holiday shopping on Thursday evening. Following the release of the NRF report, stock prices for Macy's and Target fell 1.5 and 2 percent, respectively.
So should individual investors, especially those who trade heavily in retail stocks, be worried about a reduction in holiday shopping?
Most financial analysts agree that Black Friday by itself is not an accurate indicator of how the market will perform for the rest of the year. According to Forbes analysis, however, the performance of an individual company on that day may be a reliable predictor.
The publication used Macy's as an example, stating that when the company's stock "closes higher than it opens on Black Friday, it predicts that December will do the same with 65 percent accuracy." According to Forbes, individual investors should take the time to research the historical trends of a stock before deciding to purchase more or sell off what they have out of fear.
One of the best ways to minimize risk and lessen the impact of market volatility is to actively manage your portfolio with investment management software. Peruse the SmartStops website to learn more.
Categories: Stock News