December 18, 2006 – It’s that time of the year when holidays are upon us, which translates into toy shortages and unpredictable market behavior in individual stocks. Because so many people take time off from work during the holidays, every holiday season, daily trading volume versus the average three-month daily trading volume for most stocks falls sharply lower. In fact, volume with anything investment-related, even readership of this blog, usually drops sharply this time of the year as people head out to their winter wonderland or tropical island vacation destinations. This means that just as the gift shopper is at the mercy of the seasonal toy store switch-and-bait marketing strategy , the stock shopper is at the mercy of huge institutions stepping in and dictating the price movements of individual stocks. So take a break from your normal buying in blue chip stocks no matter where in the world you live if this is a major holiday season for you right now. Over the next couple of weeks, a great buying opportunity for an asset class or two seems to be setting up right now, but as far as blue chips? Hang up the “Gone Fishing” sign.
J.S. Kim is the founder and Managing Director of maalamalama, a comprehensive online investment course that uses novel, proprietary advanced wealth planning techniques and the long tail of investing to identify low-risk, high-reward investment opportunities that seek to yield 25% or greater annual returns.