In the past few weeks I’ve been doing research for a new book that I’m writing about the U.S. Stock Market (I’ll be giving a list of all the stocks worth your time and money in the book) and interestingly I’ve noticed that the majority of companies doing the best are those from the Consumer Discretionary sector.
So basically that means that retail/manufacturers etc are doing really well again.
Which means people are spending money.
Spending Money Stimulates The Economy To Grow
And one of the best ways to stimulate the economy is for people to spend money on stuff (except if you are in debt, which in that case I don’t recommend you spend until you get your finances under control).
In Australia, to help stop the country going into debt the Government actually gave out $1,000 to every single person who files taxes in the country (so basically anyone over 18). Twice. They told people to go out and buy stuff. A lot of big screen televisions were bought as a result. Australia was one of the least affected countries from the Global Financial Crisis.
Oh and by the way I didn’t buy a TV with my money, I put it in my savings account. I did this for two reasons. 1. I hate doing what the Government tells me to do and 2. I like my money to earn interest and I already had a TV.
And Then Companies Start Hiring People Again
So if people are spending money then companies can afford to hire people again. And that ALSO is happening as the U.S. unemployment rate is now the lowest it’s been for the past three years. Companies are starting to hire again.
That’s good news. At least for us everyday people (and even if you don’t live in the U.S. like me). That means that we are beginning to see an economic recovery.
What Does This Mean For Us?
That is HUGE news if you invest in the stock market because it supports my theory of where we are in the cycle (see this post) and so now is a really great time to get back in if you haven’t already. It will allow you to buy at still reasonable prices and take advantage of the uptrend that should start to happen later this year.
Even if you don’t invest in stocks – which is fine – it means that things are getting better. You might have already be noticing that yourself anyway. I hope you have. I hope things are getting better and easy financially for you.
To a profitable 2012.
Image Credit: People of Walmart