The markets were down slightly last week but remain positive for the last month. The Producer Price Index, a measure of wholesale prices, came in lower than expected at 8% year-over-year. At the same time, expectations for earnings in 2023 from the S&P 500 companies have been falling, with analysts predicting earnings will decline due to rising interest rates and slowing growth.
As a retail investor, your job is to continue investing, taking advantage of lower valuations, or prices. Before year-end, talk with your advisor about tax loss harvesting and Roth conversions to take advantage of the current market.
As we enter the holiday season, now is the time to think about holiday spending. Last year, Americans spent an average of $1,131, with 65% going on credit cards. We’re entering a period of psychological warfare with everything you see intended to make you spend more than you planned. It’s important to have a plan and be aware.
If you are shopping this weekend, make a list before you go out. Specify who you are buying for, what you plan on buying, and how much you intend to spend. If you’re shopping the Black Friday deals, comb through the sales flyers before you go, and add any intended purchases to your list.
Stores will have great loss leaders to get you in the door, then have lots of high-priced “deals” mixed in with the bargains. It’s easy to throw in a big of candy or a big stuffed animal when your cart is already full. Stick to your list. Use your phone to comparison shop if you see something in the store that’s not on your list. And even if it’s a good deal, is that a reason to buy it? Do you need it? You’re not saving money when you buy something you don’t need.
Taking your packages to the car frequently is a great trick to control impulse buys. When you are walking around empty-handed, it’s harder to make that first purchase. When you already have handfuls of bags, you have less impulse control and it’s easier to add another purchase.
The best trick of all is to leave your credit cards at home. Your brain does not recognize that you are trading a resource for a product when you use a card; you just get the dopamine hit from the purchase. When you pay with cash, your brain recognizes the trade. The newer and crisper the bill, the more your brain values the money you’re handing over. And when your cash is gone, you’re done spending.
Your action item this week is to hit the ATM. And if you can go into the bank and get crisp new bills, that’s even better.
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Investment advice offered through Great Valley Advisor Group, a Registered Investment Advisor.
All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investment(s) may be appropriate for you, contact the appropriate qualified professional prior to making a decision.
 Reuters, Falling Q4 profit forecasts another negative for US Stocks, by Caroline Valetkevitch 11/18/22