- Black Friday is a day just after the US Thanksgiving holiday, when businesses offer great deal and discounts on the sale.
- It is considered to be a huge opportunity for marketers to attract customer attention, enhance sale and build brand awareness.
Black Friday is one of the major events in terms of shopping in a retail calendar ahead of the holiday season. Black Friday is observed just after the US Thanksgiving holiday. Bonus is the Cyber Monday, which is the following Monday.
But many consumers and experts believe that the money may be put to much better use. Many consumer associations have argued about the marketing gimmick around such shopping festivals and regularly ask shoppers to make sure that the discounts are truly genuine, as over 90% of the deals were the cheaper or same price in the six months before the Black Friday in 2020.
Many businesses offer attractive offers and provide opportunity to stock up on your favorite products on this day, but could it be better skipping Black Friday and investing your money for better return?
What is Black Friday?
Black Friday is a day just after the US Thanksgiving holiday, when businesses offer great deal and discounts on the sale and is also consider as a huge opportunity for marketers to attract customer attention, enhance sale and build brand awareness. Black Friday is associated with Thanksgiving around the mid 20th century, as it signifies US gold market crash of 1869.
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However, it is also believed that the term was originated in 1960s, in Philadelphia, US. According to Oxford University Press, the term was first used in 1610 and it has nothing to do with Black Friday and since 1961, it indicates the beginning of the Christmas season.
The Black Friday deals are often considered as a litmus test of the prevailing economic condition and a way to estimate the confidence of the average people when it comes to discretionary spending.
Skipping Black Friday
The claim that businesses make a great amount on deals and discounts are misleading. It is reported that many businesses increase prices around the Black Friday allowing them to drop prices without losing money on the item.
The rush towards discounts and offers create a sense of urgency that leads to more spending. It boosts the consumption loop as it is too difficult to fall victim to the saving around endless deals and discounts, but shoppers forget that these deals are available at various times of the year, and they may save themselves from the rush and confusion to get a better offer.
The only motive of Black Friday is to enhance the sale of retailers, but shoppers do not consider quality over quantity. At the end, it is nothing more than a well-planned strategy to get us spend more money.
Sarah Coles, Senior personal Finance Analyst at Hargreaves Lansdown, said that the offer seems less attractive this year when the items you buy have been collecting dust.
How about investing?
If you consider investing your money in, instead of spending it on Black Friday sale, you could be in far better position.
For example, if you invest money that you have been spending on your lockdown dog in fund every month, your money would have grown to £1,250 right now and if you have put £500 into Legal & General UK 350 Index Fund, your money would have grown to £590 since Black Friday 2020. An investment of £500 in high performing funds would have grown to £820 and if the same amount would have been invested in high-performing stock, it could be worth around £1,000.
How to start investing?
You can start investing using an online share dealing account, which enable you to buy an extensive range of funds, shares and other securities.
However, selecting the best share dealing platform for you is necessary to receive high value for money. In UK, government-approved tax wrapper also known as stocks and shares ISA, to help you enhance the money’s tax efficiency.
Risk in Investing
Investing is inherently risky as the prices goes up and down depending on the demand and supply of the security. In short term, you may even end up losing all your investment or a part of investment but investing in long term is safer than short term as the market has an upward bias. There are different types of risk involved in an investment, such as Inflation risk, Specific risk, Market risk, currency risk and manager risk.
So, it’s important to invest after doing detailed research to receive desired return, but if you give your money greater chance to grow, accepting associated risk is necessary. Investing in different alternatives may not be exciting as shopping your favorite products, but it could leave you in a much better position in future.