Shoptimism. That’s the one word to describe the stock exchanges rise despite the pandemic.
This is buying because you have the money, time and want to “feel good” amidst all this doom and gloom around. Shopping has and will always be the best therapy and currently, looks like everyone who has disposable income has taken to it. Everyone wants a piece of this pie, irrespective of their financial status.
Luxury brands are saying that they are seeing a boom time like never before. Darvey’s, a luxury shop shifted online after the first wave and they say things are booming, much better than even before the pandemic. Jewellery, especially diamonds are indeed proving to be the best friend to all those needing something to cheer about. The sale of diamonds has shot through the roof and the demand remained unabated through the pandemic – as the crisis deepens, there was more buying instead of vice-versa. And if you thought that marriages have become a muted affair, think again, Yes, the guest list has come down so that money saved is being splurged on ostentatiously prices clothes and many designers are laughing all the way to the bank!
Infact everything which is tagged as “luxury” is seeing sales like never before – right from gourmet chocolates to champagne, nuts, gift hampers, beauty products – everything which says, “pamper yourself” is going off the shelves like a tornado hitting the stores.
That’s how the affluent and wannabe affluents are treating themselves during these terrible times. To appease the guilt, a few thousands will be spent on charity and then its back to shopping.
This shoptimism is all about looking ahead of the pandemic – imagining the places to go, the clothes to wear, the food to eat and so on. Exactly like the stock market – it is also looking ahead, completely ignoring the ground realities, with millennials and FIIs shopping into this optimism. Everyone is stuck home and need some reason to celebrate and buying into stocks has become one big way to get that ‘feel good’ factor going.
Its important to always be optimistic but along with that one also needs to be pragmatic. Yes, no situation ever remains the same all the time; things get worse before they get better. In a few months from now, India will emerge out of the pandemic, scarred and bruised badly but surviving. But buying on a “revenge” theme – busted sectors and giving way to repressed emotions, might not be the best way.
As we have said time and again, best to keep feet firmly on the ground and eyes wide open. Its great to be optimistic but let’s not be foolishly optimistic. Buy long term good stocks or else conserve the cash as we never know when it would be required.