RSSBuy More - Save More!
By Jim Farrish | July 30, 2008 | 11:15 AM | 1 Comment
Macy’s (NYSE: M) recently had an ad that stated, “Buy More Save More!” For someone who has been in the money management business for more than 25 years it struck me funny. If I spend more, I will save more? Sounds like the tax rebate from Congress to stimulate the economy! I have taught seminars all over the country and one of the concepts I teach is buy what’s on sale. I tell the story of how I learned this concept from my loving wife. She would go to the mall and come home with a few purchases and proceed to tell me how much money she saved me. The logic never made sense, but she was convinced what she saved by buying the product on sale would bring her happiness as she benefitted from the use. So having learned a valuable lesson from her over the last 18 years (over and over again), I have applied this logic to the stock market. The current bear market is in full swing resulting in value being created various sectors. Are they on sale? If I buy more, will I save more? If I am a long term investors (36+ months) that very well could be a true statement. Stepping back and taking a look at the financial sector you could certainly apply this logic. Even with the recent rally in banks and brokerage stocks there is still value long term if you believe the sector will heal from the credit crisis.
This same logic can be applied to the housing sector and for that matter to the transportation sector. When the market has a sale of 25-50% off you should at least look, at least that is what my wife has taught me. An example of this would have been to look at Bank of America at $18. What you may have found was a deeply discounted stock paying a big dividend. While you may have not invested at that point, you may have seen future value to purchase when the opportunity presented itself based on your strategy for investing. Are financial stocks a buy currently? That depends on your strategy and what you determine is a value relative to your goals for investing. As I learned from my father a long time ago… “one man’s junk is another man’s treasure.” Some examples of that currently is (NYSE: IYW), (NYSE: IYE), (NYSE: UUP), (AMEX: DUG), (NYSE: PTJ), (NYSE: RTH), etc. Each of these ETFs represent a sector that some analyst view as buy, while others view them as a sell. I view them as an opportunity worth watching and playing based on my strategies.
The ad ended with, “Go ahead! Get all the sale and clearance items you want, and go home happy. Because the more you shop, the more you’ll save!” Go ahead find what you think is on sale or a clearance item based on your strategy and go home happy. In the end the only opinion that matters is yours.
| 
|
Comment (1) | Related Topics » Sector ETFs | The Market | ETFs | Farrish Files | Housing | Other
|
