It's officially Thanksgiving Day, which means you're likely sharing some great times with family and friends, perhaps stuffed to the core and struggling to stay awake because of the tryptophan found in turkey, and maybe even watching some Turkey Day football.
But, Thanksgiving is about much more than just stuffing our faces and enjoying a paid holiday. Thanksgiving is a time we're reminded to "give thanks" to the people around us that make our lives worth living. It's about gratitude, and this once-a-year holiday reminds us how good it really feels to be grateful for the things we have.
As investors, we also have things to be thankful for. Investing can sometimes seem like an arduous and seemingly thankless process, but if you dig beneath the surface, there are many things you can be thankful for on this day. Here are 11 of them.
1. Be thankful you have access to data at lightning-fast speeds.
Want a good reason to be thankful on this holiday? Look no further than the access you have to information at the click of a mouse or a tap on your smartphone. Prior to the advent of the Internet, your only source of company information would have been newspapers, quarterly or annual corporate filings with the Securities and Exchange Commission, the business section of the newspaper, or via a quick call to your broker or investment advisor. Today, you're able to make smart investment decisions in just a fraction of the time -- sometimes without even getting out of bed.
2. Be thankful for historically low commission costs.
Not only is information incredible easy to access, but it's also really cheap compared to historical standards. Placing a stock trade in the 1980s could only be done with a broker, and it often cost somewhere around $40 one way. Today, you have more than a handful of online brokers to choose from, many of which will allow you to complete a trade for $9.99 or less. Some low-cost options are also available, such as TradeKing, which advertises a commission cost of just $4.95 per trade.
Over the long term, commission costs won't ultimately matter too much, but you can still be thankful that you're saving a few dollars every now and then.
3. Be thankful you have the choice to be in control of your own investments.
Along those same lines, be thankful you have the option to be in charge of your own investments rather than relying on an investment company to guide you toward retirement. Wall Street companies offer no accountability to the individual investor. If a company proclaims a stock is worth $100 per share, and it winds up going bankrupt, only the individual investor is worse for the wear. Thus, be thankful you have the ability to look beyond Wall Street ratings to see the bigger picture.
4. Be thankful the SEC is there to protect you.
Working for the Securities and Exchange Commission might be considered a thankless job, but you should be grateful that this regulatory agency is there to try to protect you from businesses and investment advisors behaving badly. Not every criminal gets caught by the SEC -- Bernie Madoff managed to elude the SEC for a long time -- but the regulatory body has unearthed a number of illegal practices that take bad apples off of Wall Street and help protect your money.
5. Be thankful you can play both sides of the aisle.
As an investor, you can be also thankful that you have the ability to play both sides of the stock market. Easy access to information, low commission costs, and a willingness of brokerages to lend on margin to today's investors afford many the opportunity to buy stocks for the long term, short-sell (i.e., bet against) in order to make money when prices fall, and gain access to options in order to hedge their investments. Stocks have just as much chance of rising as falling, so your investment options are as varied as ever.
6. Be thankful for level-headed and investor-friendly CEOs.
Another good reason to be grateful is that a vast majority of corporate leaders put the interests of their shareholders first. CEOs such as Apple's Tim Cook continue to grow their companies through innovation, but Cook hasn't forgotten about shareholders along the way, either. Apple is currently paying out $11.6 billion in cumulative dividend payments to shareholders each year, and in April, the company expanded its share repurchase program to $140 billion! A level-headed and investor-friendly CEO is a blessing for investors.
7. Be thankful for dividends.
Investors should be immensely grateful that most high-quality companies pay dividends to their shareholders. Dividends can help buoy an investors' portfolio during a recession, they can act as a beacon implying financial soundness for investors (i.e., what company is going to share a percentage of its profits if it doesn't expect to grow over the long run?), and they can be reinvested back into more shares of dividend-paying stocks, thus compounding and supercharging your earning potential.
8. Be thankful for plentiful ETF options.
Do you dislike risk or the lengthy process of trying to find the best investment within an industry or country? Relax and be thankful that there's almost assuredly an ETF for that! An ETF, or electronic-traded fund, is a security that owns a basket of stocks that tracks an index, industry, country, or perhaps asset class (i.e., growth, value, large-cap, small-cap, and so on).
Buying an ETF, which often comes with a nominal annual expense ratio, can give you unparalleled investing diversity and dramatically de-risk your portfolio. Between 2000 and 2014, the number of ETFs have exploded from just 94 to 1,626 according to Morningstar.
9. Be thankful you have bountiful tax-advantage retirement options.
You should be incredibly grateful that you have numerous tax-advantage retirement tools at your disposal that you can use to grow your nest egg. Aside from an investment portfolio, you may have access to tax-advantaged retirement tools such as a 401(k) or Traditional IRA that can lower your tax liability in the current year while deferring the taxes you pay on investment gains until your golden years.
A Roth IRA is another great tool because it'll allow investors to grow their nest eggs completely free of taxation for life as long as they don't make any unqualified withdrawals. Keep in mind there are no upfront tax deductions associated with a Roth IRA.
10. Be thankful 401(k)-matching and participation rates are on the rise.
Worried about your retirement? So is your employer, apparently. According to a Charles Schwab survey, between 2010 and 2011, the number of employers providing a 401(k) match rose by five percentage points to 73%. Also between 2005 and 2011, the number of employers offering 401(k) advisement services practically doubled from 42% to 83%.
You can also be thankful that your employer is probably automatically enrolling you into the company's 401(k) plan (should one be offered). Studies show that automatic enrollment helps boost the participation rate (and the amount you'll save for retirement) as opposed to letting workers sign up on their own volition.
11. Be thankful for normal unemployment levels and historically low lending rates.
Last, but certainly not least, be thankful that the economy is running on all cylinders once again, which has led to a six-plus-year bull market. The current unemployment rate of 5% in October is the lowest reading since April 2008, and it's right in line with the historic average, which ranges between 4% and 6%.
Additionally, you can be grateful for the Federal Reserve keeping lending rates near historic lows for nearly seven years. Low lending rates have allowed businesses access to cheap capital in order to expand and hire, and it's allowed consumers to save money through debt refinancing, as well as purchase homes at phenomenally low mortgage rates.
Did I miss anything? What are you thankful for as an investor on this holiday?
Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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