As a Libertarian Capitalist, it is difficult for me to imagine a world that is less "materialistic" than it has ever been in my lifetime. I do not mean that in a bad way, it's just a new reality that everyone is facing.
Let's face it, we, collectively, who are reading these pages on this site (and every other financial medium available), are seeking to make as much money as we possibly can so that we can obtain and achieve whatever we want, need, and or desire. Many of us have already succeeded, others are clawing their way towards their goals, and others are trying to regroup after horrendous setbacks.
I believe that the face of the consumer has changed forever.
Oh, there will be holdouts of course, and still plenty of business around for the luxury, high priced, conspicuous consumer products that are all around us. I just believe there will be significantly less, and survival of the fittest will once again show its natural tendencies.
The luxury market will still be around, but just as we as a nation has evolved, so will that market for them. In my opinion it will be smaller. Much smaller.
1) The largest era of consumers, the baby boom generation, is now retiring and down sizing in earnest, so they can enjoy the balance of their lives in a more affordable way.
2) Huge numbers of unemployed have not re-entered the job market in the same capacity as before, and either have become under-employed, or early retired without choice. Some are testing the self employed arena, but it is very difficult to get funding.
3) According to all labor statistics, income has dropped, or stalled at best, while the cost of living and buying just the essentials keeps rising.
4) More and more consumers are on the government dole, either with 99 weeks of unemployment checks, or early Social Security and pensions, Social Security Disability, or "welfare" for the poorest of us, which also includes whatever form of minimum government sustenance is available, no matter what it is currently called.
5) Home values have dropped off the radar, and people are no longer moving around, and no longer have easy access to home equity funds.
Investments to Profit From the New Consumerism
Keeping in mind that this portfolio will consist of stocks with the consumer in mind, I have selected 4 key areas and one or two stocks from each, that cater to the consumer and in my opinion, will benefit greatly from the new era of consumerism.
Walmart (NYSE:WMT) has virtually everything under the sun for the new consumer: Product selection, vast inventory, huge stores just about everywhere within reach, as well as an online presence which is growing, and value pricing that is less expensive than basically everyone else.
Amazon.com (NASDAQ:AMZN) has nearly the same selection of products that WMT offers, however, it also has several competitive advantages over the vast array of retailers in the world. No brick and mortar stores to maintain and staff, a lower cost of doing business, an online presence that is second to none in retailing, and born at the same time as the new consumer; they virtually have grown up together. No other retailer "speaks" to the new consumer the way AMZN does.
Ford (NYSE:F) has turned itself around without the use of taxpayer money and offers a wide assortment of very affordable cars, that the new consumer is now telling us they love, by virtue of the increasing sales figures. F has regained the momentum to become the number one auto manufacturer in the world and even has an affordable luxury assortment (Lincoln) that will continue to attract the consumer who continues to aspire, but for less money.
Corning (NYSE:GLW) is quite unique in that it has very little real competition, makes huge profits, and has what everyone needs. It makes the screen "glass" for virtually every wireless device on the planet, and every monitor being made today, including TVs of today and of the future, and makes them so affordable that every device will continue to come down in price. I cannot think of a better manufacturer that is basically in the background, but also at the forefront, of what the new consumer is buying now, and will be buying for a very, very long time into the future.
Unitedhealth Group (NYSE:UNH) not only has all the healthcare services that are needed by the new consumer, but it also supplies those products to more employers of all sizes, and also has the products that are required today for the boomer generation. They have every kind of health care insurance that is being sold today, whether it be individual policies, group policies, employer programs or government social programs such as Medicare Supplemental plans and Medicare Advantage plans. Profits are enormous, and growth has been seemingly endless, especially now with the Governments Affordable Healthcare Act ready to explode for the uninsured (as of now).
Apple (NASDAQ:AAPL) has what everyone wants. The "toys" of today and of tomorrow. Their products capture the very essence of the new consumer in basically every aspect of the consumer's life, and has made each product more and more affordable, easier to use with every new product launch, and more enjoyable to use for everyone on the planet. There is simply no reason I can see that changing, far, far into the distant future. AAPL is the one technology company that has it all. Who knows what their next surprise will be for us.
By owning shares of the aforementioned companies, I believe that investors can profit for the long term within the new paradigm shift of the consumer age. As you research the fundamentals of each of these stocks, you will not find many flaws, but of course you should always do your research to determine if these stocks should be in your portfolio. I believe they should be.