Happy Easter! As I grabbed the eggs and other staples at the local grocery this weekend, I ran into an old friend that ran up to me and asked “So, what do you invest in when the market is at a multi-year high?”. The question itself isn’t that uncommon but it made me look around the store and I had to chuckle at what I saw.
When in doubt about where to invest, you can always consider investing in what’s in your cart. Many of these products are classified as consumer staples and may be appropriate for investors seeking an opportunity for steady growth and a bit more stability than other asset classes.
Eggs and Staples
The Consumer Staples sector includes agricultural products, personal products, soft drinks (the largest portion of sector), food retail, food distributors, brewers, packaged foods and meats, super centers, household products, drug retail, tobacco and distillers.
Many firms operating in sector are experiencing increased sales in developing markets which is a trend likely to continue. Due to the diversity of the sector itself, most every investor can find something in it.
Standard & Poor’s, as of 4/1/2012, has the sector ranked as “over weight” indicating there may be value there now with a chance the sector will outperform the broader market in months to come.
Investing in one particular sector can involve more risk than investing more broadly across many sectors so you should determine, with assistance of your advisor, what may be an appropriate position for you.
As I strolled around looking into all the carts, I only saw one or two that didn’t have brand names soft drinks or packaged snack foods. This may not surprise you but could serve as a reminder that good investment ideas may be right in front of us.
Final note: If you see an “Index”, understand that you can’t invest directly into it. Indices often track price fluctuations but aren’t direct investment vehicles. Thanks!
Until next week,
Susan R. Linkous