Markets remain in the doldrums thanks to a slew of narrative headwinds dampening investor confidence, whether it's the Fed's "higher for longer" stance on interest rates, pending concerns over a government shutdown, or 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.
Whenever you're in a down market and consumers are 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 provide staple items that they need, they're usually the first on the chopping block when people are tightening their proverbial belts.
But that also opens up a window of opportunity for investors, especially when long-term trends are bullish, as I've been saying for a while now. Whenever consumer confidence surges again, a lot of these companies could take a nice ride higher, especially if you managed to get them at a steep discount.
That said, 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 some 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.
Check out this video for all the details:
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 quickly approaching the time where there'll be nothing "discretionary" about AI, and it will be integrated into pretty much every facet of our lives, just like the Internet during the 90s.
It's a no-brainer that every investor should get exposure to this space, but the best profits won't necessarily come from companies like Microsoft or Google. There's a little-known industry that could potentially 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. Check it out here.
The post The Smart Way to Play Consumer Discretionary Stocks Right Now appeared first on Total Wealth.
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.