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With the stock market down 55% or so from its high of October 2007, many investors feel they are between the proverbial rock and a hard place. We’ve all seen the data that shows that over the long term, stocks outperform every other common asset class, but that knowledge certainly doesn’t make the going any easier on a day to day basis. And with the shocking events surrounding the instability and collapse of some of this country’s biggest and reputable institutions, the long-term picture gets even hazier.

So what are your options, knowing that you need equities for portfolio growth and inflation protection, but are very uncomfortable with the stock market? Here’s an idea I’ve been sharing with other investors that makes sense to them.

For starters, all successful investors from Warren Buffett to Peter Lynch focus on companies whose products and services stack up nicely from a supply and demand standpoint. On the demand side, investing in areas where demand is stable or increasing would appear to fit these guidelines. An area that I feel meets these criteria is the consumer staples sector. Thankfully, I am not alone in this assessment. Wall Street strategists such as Richard Bernstein are expecting good relative performance from this industry.

Consumer Staples contains such household names like Wal-Mart, Procter and Gamble, Coca Cola, and General Mills. Economists have touted the inelasticity of consumer goods for years, and with good reason. Regardless of how poorly we are doing financially, we still find the money to buy food, beverages, and toiletries.

The County Fair

Every year I go to an old fashioned county fair. This is not just any ordinary fair; it is reputedly the largest tent fair in the nation. Yes, believe it or not, people actually pitch tents or park their RVs and camp out for a whole week. And there is a 40-year waiting list to get a campsite! Thousands come from miles around for the fellowship, competitions, and well, the food. Frankly, many people I talk to come solely for the last reason. There are vendors offering everything from French fries to snow cones.

With the economy in recession, I was very interested to see if this fair would be slower than most. I spent practically the whole weekend at it. There were no signs that attendance was down or that concession stands were less busy than normal. Matter of fact, I had my normal tedious time making my way through the throngs of people to the next concession stand.

Just to make sure I wasn’t imagining anything, I spoke with one of my friends who own a stand. He said business was even better than normal. A phone call to the Fair management also confirmed this. Attendance was as good as last year, and the vendors reported an average increase of 10% in sales. And this considering that food at a fair is not exactly cheap. You can get an ice cream cone one block from the fairgrounds for half the price. It did not make a difference.

Some analysts on Wall Street have been concerned about consumer goods companies this year, because they feel that rising commodity costs impact the bottom line. With the price of oil and other commodities well off last summer’s highs, this fear seems to have dissipated somewhat. Also, it seems to me that these companies are not exactly taking these increases lying down. They’re passing them on to the consumer. I noticed this at the fair. Prices on many of my favorite things were up 5 or even 10%.

I am noticing a different approach at restaurants I routinely visit. Instead of raising prices, many are cutting portion sizes.

How have consumer staples done so far in this downturn? Over the past twelve months, the Dow Jones U.S. Consumer Goods Index is down 35% as of the date of this writing. The S

About The Author:
Mack Courter is a Certified Financial Planner ™ who specializes in Retirement Investing in State College, Pennsylvania and works with clients nationwide. If you have any questions about the article, or would like a complimentary copy of his report \”7 Critical Mistakes Investors Make,\” visit his website at http://www.courterfinancial.com or email him at his website.

Popularity: 6% [?]

With the stock market down 55% or so from its high of October 2007, many investors feel they are between the proverbial rock and a hard place. We’ve all seen the data that shows that over the long term, stocks outperform every other common asset class, but that knowledge certainly doesn’t make the going any easier on a day to day basis. And with the shocking events surrounding the instability and collapse of some of this country’s biggest and reputable institutions, the long-term picture gets even hazier.

So what are your options, knowing that you need equities for portfolio growth and inflation protection, but are very uncomfortable with the stock market? Here’s an idea I’ve been sharing with other investors that makes sense to them.

For starters, all successful investors from Warren Buffett to Peter Lynch focus on companies whose products and services stack up nicely from a supply and demand standpoint. On the demand side, investing in areas where demand is stable or increasing would appear to fit these guidelines. An area that I feel meets these criteria is the consumer staples sector. Thankfully, I am not alone in this assessment. Wall Street strategists such as Richard Bernstein are expecting good relative performance from this industry.

Consumer Staples contains such household names like Wal-Mart, Procter and Gamble, Coca Cola, and General Mills. Economists have touted the inelasticity of consumer goods for years, and with good reason. Regardless of how poorly we are doing financially, we still find the money to buy food, beverages, and toiletries.

The County Fair

Every year I go to an old fashioned county fair. This is not just any ordinary fair; it is reputedly the largest tent fair in the nation. Yes, believe it or not, people actually pitch tents or park their RVs and camp out for a whole week. And there is a 40-year waiting list to get a campsite! Thousands come from miles around for the fellowship, competitions, and well, the food. Frankly, many people I talk to come solely for the last reason. There are vendors offering everything from French fries to snow cones.

With the economy in recession, I was very interested to see if this fair would be slower than most. I spent practically the whole weekend at it. There were no signs that attendance was down or that concession stands were less busy than normal. Matter of fact, I had my normal tedious time making my way through the throngs of people to the next concession stand.

Just to make sure I wasn’t imagining anything, I spoke with one of my friends who own a stand. He said business was even better than normal. A phone call to the Fair management also confirmed this. Attendance was as good as last year, and the vendors reported an average increase of 10% in sales. And this considering that food at a fair is not exactly cheap. You can get an ice cream cone one block from the fairgrounds for half the price. It did not make a difference.

Some analysts on Wall Street have been concerned about consumer goods companies this year, because they feel that rising commodity costs impact the bottom line. With the price of oil and other commodities well off last summer’s highs, this fear seems to have dissipated somewhat. Also, it seems to me that these companies are not exactly taking these increases lying down. They’re passing them on to the consumer. I noticed this at the fair. Prices on many of my favorite things were up 5 or even 10%.

I am noticing a different approach at restaurants I routinely visit. Instead of raising prices, many are cutting portion sizes.

How have consumer staples done so far in this downturn? Over the past twelve months, the Dow Jones U.S. Consumer Goods Index is down 35% as of the date of this writing. The S

About The Author:
Mack Courter is a Certified Financial Planner ™ who specializes in Retirement Investing in State College, Pennsylvania and works with clients nationwide. If you have any questions about the article, or would like a complimentary copy of his report \”7 Critical Mistakes Investors Make,\” visit his website at http://www.courterfinancial.com or email him at his website.

Popularity: 5% [?]