Daily Gains Letter

Discretionary Stocks

Best Discretionary Stocks to Invest in 2015

Consumer discretionary stocks are made up of companies that sell non-essential goods and services. This includes travel companies, automakers, restaurants, media companies, and apparel companies.

Consumer discretionary stocks are the opposite of consumer staples stocks, which consist of businesses that sell goods and services that people need—like food and drugs.

When the economy is doing well, discretionary stocks perform well because consumers are more optimistic and tend to have more discretionary income to spend. On the other hand, discretionary stocks can perform poorly when the economy isn’t showing sustained growth.

Consumer Spending Growth in February Bad Sign for Investors?

Consumer Spending GrowthThe United States Census Bureau reported consumer spending in the U.S. economy—adjusted for price fluctuation—increased by 0.2% in February from the previous month. In January, consumer spending increased by 0.1% after seeing a decline in December. (Source: “Personal Income and Outlays, February 2014,” United States Census Bureau web site, March 28, 2014.) This sent a wave of optimism through the markets. We heard consumer spending is going higher; therefore, the U.S. economy will improve. Buy and buy some more, or you will miss out on future gains was what we were told. However, I don ... Read More

Stock Market Sell-Off Making This Sector an Attractive Buy?

Stock MarketWith the markets selling off, many may not think now is the best time to consider discretionary stocks. But it’s because the markets are selling off that beaten-down stocks selling non-essential products and services (what people want, not need) might be worth a second look—not just because many discretionary stocks are beaten down, but rather because consumer spending fuels the majority of economic growth in this country. Normally, when consumers have the money to spend, they do so on discretionary items like travel, electronics, cars, and luxury brands. But, as virtually all of us can contest, this isn†... Read More