A better-than-expected retail sales number gave part of the
market some firepower this morning, but we did see selling in
momentum-based higher-beta stocks (Apple, Priceline, Google, etc.).
Speaking of retail sales, I have some interesting color on that
We are about to kick off earnings season big-time this week, and
we started with a few names already today. Citigroup (
) closed higher on
its earnings beat
. Meanwhile Mattel (
as did Gannett
), and both stocks ended the day lower on that news.
Shares of Reliance Steel (
) were up on news
the company raised earnings guidance.
Elsewhere, Wall Street analyst upgrades had stocks like Vornado
Realty Trust (
) and Caterpillar (
) moving higher.
You've got to love how the media justifies how and why consumers
shop and spend. In a recent Bloomberg article, an economist pointed
to "frugality fatigue" as the reason retail sales have seen an
uptick recently. This part of the quote says it all: "…for most
people alive today, it's the longest they've had to conserve
financially." Oh the suffering!
Forgive me if I don't feel very sorry people living in our
modern age of safe, reliable vehicles, sizable flat screen TVs,
full-featured smartphones, and massive homes that our grandparents
could only dream of. Any way you slice it, consumers are far better
off in 2012 than they were in any previous generation.
So as much as the media likes to highlight ways for all of us to
save money here and there, the truth is that
is their number one message. Why? Advertising revenue is what pays
the bills for most media companies. Maybe instead of consumers
suffering from "frugality fatigue," the media is just tired of
waiting for the economy to recover. Remember, the mainstream media
stands to profit when people go out and spend with reckless
I'm not arguing against spending money. Actually, I believe in
setting up a reward system. Human nature dictates that people react
well to receiving a reward. In fact, often times we may choose not
to proceed in a specific direction if there is in fact no reward
for the sacrifice.
Younger people tend to delay their long-term goals of saving and
investing because it is not a reward they can enjoy at the present
time. So rather than saving early and often, they put it off and
won't worry about it until they feel it's the proper time.
Unfortunately, some never learn the lesson of saving/investing
until they're already lost control of their financial destiny.
I suggest setting up a reward system so that you can enjoy a bit
of the good life, all the while saving for a
good life in your later years. For most of us, our opportunities to
succeed become few and far between over time, especially if we
don't control our own income stream (unless you work for yourself,
it's very difficult to guarantee yourself a job).
Don't deny yourself of some of those must-have privileges you
see as a reward for your hard work. Working more and creating extra
income to invest and spend is on strategy. Or, you can shave down
your regular spending habits to free up extra cash, all the while
still setting yourself up to invest and prepare for good times all
throughout your life.
Whatever you reward strategy is, be careful of who the messenger
is regarding your spending habits. The media certainly doesn't have
all the answers.
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