Sundry Photography Introduction As the U.S. Consumer Goes, So Goes the U.
S. Economy. This is what The White House wrote on October 30, 2023, when it highlighted the resilience of the U.
S. consumer. Although we're dealing with old news, one thing stood out to me, which is the importance of the U.
S. consumer when it comes to the economy. Consumption spending makes up two-thirds of the U.
S. econom y on average, so as the U.S.
consumer goes, so goes the U.S. economy.
- The White House Americans love to spend money, which is why consumer stocks have done so well after the Great Financial Crisis when consumers started to build equity in their homes and benefitted from mostly low inflation, subdued rates, and subdued geopolitical issues, which provided support from cheap goods produced overseas. Since January 2010, the Consumer Discretionary ETF ( XLY ), which consists of 25% Amazon ( AMZN ), has returned 608%, beating the S&P 500 by almost 90 points. Data by YCharts In this case, I'm generally not a fan of consumer stocks.
I dislike that investing in consumer stocks often comes with the need to predict which products will do well with consumers, including fashion, car brands, and whatnot. That said, the U.S.
is home to some of the most fascinating consumer stocks that allow us to invest in "big picture" trends without having to guess which product consumers will go after next. For example, one of the first stocks I bought for my dividend portfolio was Home Depot ( HD ), which gave .