Black Friday Investing: Should You Buy or Sell?

The biggest annual test of the American consumer is upon us.  Both online and offline stores are about to enter their busiest time of year.  Starting with Black Friday – the day after Thanksgiving – stores will clamor for the attention of shoppers while shoppers clamor for the best deals.  Yes, our national pastime of consumption will be in full force yet again.  Or will it?

Estimates differ as to whether this holiday season will be as strong as last year.  Seniors are not receiving a cost of living raise as in years past, which could mean fewer toys from Grandma and Grandpa.  With unemployment now reaching into double digits, there will probably be fewer gadgets, less debt, and more enjoyment of the things that money can’t buy.

As for investors, the question for this holiday season is should you buy or should you sell?

If you’re bearish, you might consider a short-term position in ProShares’ UltraShort Consumer Goods ETF (SZK).  This ETF seeks 200% of the inverse of the Dow Jones U.S. Consumer Goods Index daily performance.  SZK should do very well if holiday sales are slower than expected.  Bear in mind, SZK has been on a downward trek for the past several months.  If you’re not averse to bottom fishing, you might catch it at a nice low.

If you’re bullish, you can buy any number of a long Consumer Discretionary ETFs.  The most popular is the Consumer Discretionary SPDR (XLY).  You could get more aggressive with Proshares Ultra Consumer Goods ETF (UGE).  Pricing for UGE has roughly followed the market in recent months, except on a 2X basis.

The other way is to contribute is by funding your own consumer-driven economic stimulus: buy stuff.  But make sure you’re getting the most for your dollar.  CNNMoney.com published their 11 Big Black Friday Deals.  It includes everything from LCD televisions, TomToms, digital cameras and slow cookers. Of course, you can always wait for the Thanksgiving newspaper to get the latest local deals.

If you’re more interested in tech gadgets, CNET published their Five Black Friday Deals You Shouldn’t Miss.  One of the deals that piqued my interest was Bing’s (Microsoft’s new Search Engine) Gold Rush program.  They’re offering 3%, 10%, and sometimes 35% cashback for online shoppers.  If you’re buying online, you might want to check out Bing first.

Disclosure compliant with FTC 16 CFR Part 255 covering writer, editor, and publisher: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.