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Betting on consumption has been a winning investment strategy in 2010. The S&P 500's top sector this year through December 1 is consumer discretionary, posting a 23.4% total return. That's more than double the broad market's year-to-date gain, as measured by the S&P 500's 10.2% rise through yesterday.

At the opposite end of the sector spectrum is the so-called safe haven of health care stocks, a sector that's retreated by 1.7% in 2010 through December 1.

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"It seems as though just about everyone has been down on the US economy, in general, and the US consumer, in particular," Yardeni Research advised in a note to clients on Monday. Mr. Market has been advising otherwise. "The stock market is telling us that the US economy, in general, and the U.S. consumer, in particular, are in better shape than widely perceived."

Is that view gaining traction in consumer sentiment readings? Yes, or so the Conference Board advises. Consumer confidence rose to its highest level in five months, the consultancy reports in Tuesday's update of its consumer confidence index. "Consumers’ assessment of the current state of the economy and job market, while only slightly better than last month, suggests the economy is still expanding, albeit slowly," the Conference Board said in a press release. "Expectations, the main driver of this month’s increase in confidence, are now at the highest level since May."

There's also a bullish momentum in retail sales lately too. October spending rose 1.2%, the fastest pace since March. Meantime, the holiday shopping season appears to be strong too. Retail e-commerce spending for November 1-29, for instance, rose 13% over the same period last year, reports comScore.

The government's November reading of retail sales is scheduled for release later this month, on December 14.

Source: A Strong Year for Consumer Stocks