Black Friday is just around the corner and it has long since become more than just a shopping event. The stocks of large retailers such as Amazon in particular can react to peak sales in the short term.
• Black Friday increases sales and stock market prices in the short term
• Historical data often shows a reverse pattern
• Seasonal effects don’t just affect retailers
Amazon and Black Friday: short-term price boost
According to asset manager GSB, analyzes show that the share prices of large retailers such as Amazon often rise around Black Friday and Cyber Monday. In recent years, Amazon has reported record sales during Black Friday week. Such reports have a positive effect on investor sentiment and can drive up the price in the short term.
No guarantee of long-term profits
Despite the temporary price gains, the impact on the year as a whole is limited. Analysis of the S&P Retail Select Index since 1999 shows that a price increase during Black Friday often results in weaker performance for the remainder of the fourth quarter and vice versa, according to research by GSB. The explanation: Investors tend to overreact. Expected holiday sales create hope that doesn’t always come true.
Seasonality in the stock market
In addition to Black Friday, there are other seasonal effects, according to Goldesel: Less active traders during the summer holidays or increased trading volume at the end of the year can create volatility. In addition, price movements often reflect expectations: a price rises because investors are willing to pay more – regardless of actual sales figures.
Tips for investors
For long-term investors in Amazon or other retailers, short-term fluctuations around Black Friday are hardly important. The event in November can move the stock markets in the short term, but patience remains the decisive factor for long-term investment success. If you focus on your goal and set up your portfolio accordingly, you can enjoy the holidays in a relaxed manner without having to keep track of every price jump.
Editorial team finanzen.net
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