{"id":45087,"date":"2013-12-06T12:42:32","date_gmt":"2013-12-06T17:42:32","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=45087"},"modified":"2013-12-06T12:42:32","modified_gmt":"2013-12-06T17:42:32","slug":"cant-afford-picasso-try-investing-stock-instead","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/12\/06\/cant-afford-picasso-try-investing-stock-instead\/","title":{"rendered":"Can\u2019t Afford a Picasso? Try Investing in This Stock Instead"},"content":{"rendered":"

By Sasha Cekerevac<\/a> for Investment Contrarians<\/a><\/p>\n

\"InvestingThere\u2019s one point that I cannot stress enough in this column, and longtime readers are sure to know it: consumer confidence<\/a> is extremely important for economic growth here in America.<\/p>\n

It\u2019s simple logic. Because so much of our economy is built on domestic spending, without an increase in consumer confidence, consumer spending will languish and we won\u2019t have higher levels of economic growth.<\/p>\n

Recently, new information from the Conference Board was quite disappointing. The Consumer Confidence Index dropped to a seven-month low in November to 70.4, following a decline in October as well. (Source: \u201cConsumer Confidence Declines Again in November,\u201d The Conference Board web site, November 26, 2013.)<\/p>\n

Over the short term, consumer confidence declined due to people stating their concerns regarding a weakening of economic conditions. What\u2019s more concerning is that the expectations for the next six months worsened, as people stated they were increasingly worried about their job prospects and earnings, which isn\u2019t a surprise considering the data hasn\u2019t been all that positive lately, especially when it comes to wage growth.<\/p>\n

If consumer confidence is turning pessimistic over the stability of jobs or paychecks, how can we really expect the average American to increase their spending or businesses to feel more confident in expanding?<\/p>\n

This type of uncertainty leads to slower economic growth. If you are unsure of your financial health over the next few months, chances are you won\u2019t increase your spending, and a lower level of consumer confidence leads to muted economic growth.<\/p>\n

Clearly, one market sector I am worried about is that of companies catering to the average American.<\/p>\n

\"Target <\/a><\/p>\n

Chart courtesy of www.StockCharts.com<\/i><\/p>\n

Target Corporation (NYSE\/TGT) is exactly the type of company I would avoid. With consumer confidence and slower economic growth, this type of retailer is being forced to participate in extremely competitive price matching just to win that one dollar from price-conscious consumers. Of course, this leads to lower income levels and smaller profit margins.<\/p>\n

I would continue to be very cautious about any company that sells to the average American. However, not all consumers in the U.S. economy are suffering from stagnant (and dismal) wages, declining consumer confidence, and the lack of economic growth.<\/p>\n

The wealthy are benefiting from higher asset prices, especially in the stock market. If you were to take a look at the high-end art market, you would see that many assets in this sector are hitting record levels in spite of declining consumer confidence and nonexistent economic growth.<\/p>\n

The following stock chart is of Sotheby\u2019s (NYSE\/BID), the famous international auction house. Clearly, this chart looks much different from Target\u2019s chart above.<\/p>\n

\"Sothebys <\/a><\/p>\n

Chart courtesy of www.StockCharts.com<\/i><\/p>\n

With the superrich segment of the global population benefiting from money printing, they\u2019re piling their investing dollars into assets like high-end art. As a shareholder in this stock, one can profit through the company\u2019s commission from each sale.<\/p>\n

Your wages may not be increasing, but that doesn\u2019t mean you can\u2019t make money in this market. While no one can predict exactly what a stock will do, in my opinion, over the next decade, we will continue to see money printing coming from not just the Federal Reserve, but from central banks around the world. And it\u2019s clear that all of this easy money will continue to benefit the top one-percenters, who would like nothing more than to spend this cash on some fine art.<\/p>\n

I may not be able to afford a Picasso, but I can certainly appreciate it if I owned shares in a stock like Sotheby\u2019s.<\/p>\n

 <\/p>\n

See Original: http:\/\/www.investmentcontrarians.com\/stock-market\/cant-afford-a-picasso-try-investing-in-this-stock-instead\/3398\/<\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By Sasha Cekerevac for Investment Contrarians There\u2019s one point that I cannot stress enough in this column, and longtime readers are sure to know it: consumer confidence is extremely important for economic growth here in America. It\u2019s simple logic. Because so much of our economy is built on domestic spending, without an increase in consumer … <\/p>\n

Continue reading “Can\u2019t Afford a Picasso? Try Investing in This Stock Instead”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-45087","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/45087","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=45087"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/45087\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=45087"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=45087"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=45087"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}