The most powerful force in the U.S. economy is consumer spending. Accounting for nearly 70% of our nation’s gross domestic product (GDP), our spending on everything from lattes and laundry detergent to dog grooming services really drives our nation’s growth engine. And, that continued spending is just why retirement investors need to have a dose of consumer stocks — both staples and discretionary — in their portfolios.
There are other reasons why retirement investors may want a hefty dose of consumer stocks buoying their portfolios. For one thing, they are great dividend payers.
As America’s continued spending spree has gone on for decades, many consumer stocks have become major dividend payers. After all, items like toothpaste and shampoo are pretty recession-resistant. Meanwhile, many discretionary consumer stocks have matured into stable, multi-national businesses that are almost immune to how fickle consumers can be. Both of these things drive sales and, ultimately, cash flows.
With their generally stable nature and great dividend potential, consumer stocks belong in every retirement investor’s portfolio. With that in mind, here is one consumer stock, one exchange-traded fund (ETF) and one mutual fund to buy today.