In today's edition of "Talking Stocks," analyst Austin Smith takes a step back and wonders where consumer goods or retail investors should put putting their hard-earned dollars in this economy.
With overall spending outpacing revenue growth, unemployment remaining high, and the savings rate declining, Austin is looking at deep-value retailers and consumer staples companies. It's a proven and predictable strategy for sustaining and growing wealth in tough economic climates. While the high-end consumer is likely to spend regardless of broader economic conditions, this is a smaller audience whose spending patterns can be harder to predict since there is a layer of discretion and preference. The opposite is true of the low-end consumer, whom you can often count on to trade down to discount retailers and buy only essentials when the going gets tough.
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Austin Smith has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.