When Black Friday Comes

Are you shopping today? You might notice the crowds being a little smaller than normal, despite the fact that a relatively late Thanksgiving has shortened the holiday shopping season this year. According to a Gallup poll, Americans say they will spend about $706 on gifts this year. That's down about 8 percent from last year's figure.

Despite the fact that the economy has been officially in recovery for a couple of years now, people still feel spooked. Nielsen's holiday shopping survey found that 68 percent of American consumers still feel like they're living in a recession.

If you are thinking about braving the crowds, here's a trip from the market-research firm ShopperTrak: Wait till next week. The crowds will be much lighter than this weekend, and the Black Friday deals will mostly still be in force.

Thoughts for Thanksgiving

“Thanksgiving is the holiday that encompasses all others. All of them, from Martin Luther King Day to Arbor Day to Christmas to Valentine's Day, are in one way or another about being thankful.” ~ Jonathan Safran Foer

“Thanksgiving is an emotional holiday. People travel thousands of miles to be with people they only see once a year. And then discover once a year is way too often.” ~ Johnny Carson

“Not what we say about our blessings, but how we use them, is the true measure of our thanksgiving.” ~ W.T. Purkiser

The Challenges of Being Self-Employed

For most American workers, saving for retirement has become easy, something you don't even have to think about. We have automatic deposits made to our 401(k)s, taken out of every paycheck. For the self-employed, though, the process is not so easy.

A new survey from TD Ameritrade brings this problem home. Only 12 percent of American workers who are employed by someone else are not saving regularly for retirement, but that situation applies to 40 percent of the self-employed. And 28 percent of the self-employed aren't saving anything for retirement.

The biggest challenge for the self-employed is that they fear their income isn't steady enough to be putting aside regular amounts for retirement. Some 61 percent of those surveyed said that was keeping them from fully funding their retirements. But aside from the ubiquitous 401(k), there are several options for self-employed people to fully fund their retirements. If you'd like to know more about them, feel free to give me a call.

The Meaning of Thanksgiving

Thanksgiving is traditionally the kickoff of the holiday shopping season, and a significant indicator for the health of our economy. But it also presents a bit of a turning point for the stock market as well. In recent years, the market has consistently risen during the three weeks starting with the Friday before Thanksgiving.

Each of the past ten years, the S&P 500 index has increased over that time period. The average increase for that three weeks has been 3.2 percent - which may not sound like a lot, but is pretty significant for about 5 percent of the trading year.

Oddly enough, the strongest of those three-week periods came when the market was, overall, in free-fall. In November and December of 2008, as the S&P was on its way to bottoming out in March of 2009, the index rose by nearly 10 percent.

The S&P's Perfect 10

We've talked a lot about how strong the S&P 500 has been so far this year, but maybe the most remarkable thing about this rally is how broad-based it has been. There remains the possibility that each of the ten sectors within the S&P 500 could increase by 10 percent or more this year.

The only sector falling short of that 10 percent mark so far is Telecommunications, which is up 8 percent. Meanwhile, Health Care and Consumer Discretionary are both up by a whopping 36 percent.

We haven't seen all ten sectors rise by 10 percent in a year since 1995, when the index rose by 31 percent overall. In 2003, the S&P 500 was up by 26 percent on the year, but both Telecoms and Consumer Staples fell short of the 10 percent mark.

Confidence Inches Up

The government shutdown back in early October had an unsurprising dampening effect on most Americans' view of our economy. Gallup's Economic Confidence Index dropped to -39 in mid-October, its low point for the year. So it's probably to be expected that confidence is now rising again, back up to -24 in the latest reading.

But the slowdown may still be having lingering effects. The confidence gauge is still lower than it was all year prior to October; it had bottomed out at -22 at the beginning of March. The high point for the year came in early June, when the confidence reading hit -3.

You may have noticed that all those numbers are negative, but that doesn't mean that 2013 has been unusually dour. In fact, this year is shaping up to have, in aggregate, the highest economic confidence of any year since 2007, before the recession.

Problems of the Superwealthy

The impression most people get of the superwealthy is that they're fantastically good at managing their money - or at least they can hire the best people to manage it for them. But a new study from several major universities looked at the portfolios of the 115 wealthiest families in the U.S., with an average net worth of $90 million, and found that they make many of the same mistakes that ordinary investors do.

Their asset allocation isn't much different from the rest of us. The superwealthy families put 50 percent of their assets in stocks and 30 percent into bonds, although they also put 10 percent into private equity and 10 percent into hedge funds. Hedge funds turned into an investment fad around 2005, which is when so many of these wealthy investors put money into them - and just before they turned south during the financial meltdown.

Poor timing seems to be their biggest mistake. When the stock market started collapsing in 2008, the wealthy investors were very slow to sell their shares, then didn't take advantage of the low stock prices to scoop up bargains. Oddly enough, the median member of the superwealthy group had just as much in cash in 2007 as they did in 2009 - in two very different market environments. Fortunately, they had plenty to lose.