Markets are experiencing a slew of narrative headwinds that are causing investors to lose faith in the economy, whether it's the Fed's 'higher for longer' stance on interest rates, pending concerns over a government shutdown, or a continuing woes for an overextended banking system. There is a chance that we could get a short-term pop just on a mechanical basis alone - a classic 'gamma squeeze' - but overall, the trend is down.
If you're in a down market and consumers are being tapped out, there's one category of stocks that tends to get hit hardest - companies that deal in discretionary goods and services. Because consumers don't need these businesses to supply essential items that they need, they're usually the first on the chopping block when people tighten their proverbial belts.
But this also opens up a window of opportunity for investors, especially when long-term trends are bullish, I've been saying for a while now. While consumer confidence surges again, a lot of these companies could take a nice ride, especially if you managed to get them at a steep discount.
We have to play it real careful, because we're not in deep, deep correction territory just yet, and as I just said, there's a chance of another short-term pop as market makers go through their usual dance of trying to push markets higher. There are certain speculative plays worth making right now, but what I really want you to keep an eye on are the key support levels that signal ideal buy-in points for some of these household names.
You'll notice I left something out while I was covering consumer discretionary stocks, and that was very much on purpose. I'm talking about AI, and I left it out for a very simple reason. We're rapidly approaching the time where there's nothing 'discretionary' about AI, and it will be integrated into pretty much every aspect of our lives, just like the Internet during the 90s.
It's a No-brainer that every investor should have access to this space, but the best profits won't always come from companies like Google or Microsoft. There's a sector that could rapidly grow at the same rate as AI adoption, and investors have a chance to see returns that could blow the doors off of the big names.
I've got a full briefing out now with some targets I think have the best potential. The post The Smart Way to Play Consumer Discretionary Stocks Right Now appeared on total wealth.
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