The Smart Way to Play Consumer Discretionary Stocks Right Now

Shah Gilani|September 27, 2023

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:

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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.