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What are Consumer Staples Stocks?
Consumer Staples are generally defined as companies that sell goods with inelastic demand, meaning that economic conditions generally don’t impact a consumer’s need for the product. They are also referred to as ‘non-cyclical,’ meaning that demand should not significantly waver even if the economy enters a recession. Because the earnings of consumer staples stocks is generally less volatile, they have historically outperformed other stocks during prolonged market downturns. Continue reading...
What are Consumer Discretionary Stocks?
Consumer Discretionary companies are those that sell ‘non-essential’ items, such as clothing retailers, media and entertainment, luxury goods, auto makers, and so on. Consumer discretionary companies tend to sell goods with elastic demand, meaning that demand goes up as economic conditions are good and falls when conditions are slowing or recessionary. Consumer discretionary companies are also categorically referred to as ‘cyclicals.’ Consumer discretionary stocks can also include companies in the service industry, like hotels and restaurants. Continue reading...
What is the Consumer Price Index (CPI)?
The Consumer Price Index (CPI) is a measure of the average change, over time, in the prices paid by urban consumers for a market basket of consumer goods and services. The CPI is an important economic indicator, as it’s changes influence the Federal Reserve’s monetary policy decisions and it gives an indication if an economy is experiencing adequate inflation. The most common reading on the CPI is % change from a previous period, with most developed economies generally striving for 2% annualized inflation. Continue reading...
How is the Consumer Price Index (CPI) Calculated?
The Consumer Price Index (CPI) is calculated using prices of sample goods from predetermined urban areas. According to the Bureau of Labor Statistics (BLS), the CPI is a product of a series of interrelated samples. First, using data from the 1990 Census of Population, BLS selected the urban areas from which data on prices were collected and chose the housing units within each area that were eligible for use in the shelter component of the CPI. The Census of Population also provided data on the number of consumers represented by each area selected as a CPI price collection area. Continue reading...
What is the Federal Savings and Loan Insurance Corporation (FSLIC)?
Created about the same time as the FDIC, the FSLIC, which insured up to $100,000 in deposits at savings and loan institutions, also known as “thrifts.” In the 1980s, the “savings and loan crisis” caused the FSLIC to become insolvent. In 1989 it was disbanded by the FIRREA Act and replaced by the Resolution Trust Company (RTC) which was merged with the FDIC a few years later. During the 1980s, a huge number of savings and loan companies (“thrifts”) went bankrupt. Continue reading...
What is the Federal Energy Regulatory Commission?
The FERC oversees the interstate commerce surrounding oil, energy, and natural gas. This regulation and oversight might deal with pipelines and storage facilities, permits for future exploration sites, environmental and safety concerns with projects, as well as the sale and transfer of these commodities. FERC deals with the companies engaged in the extraction, transfer, storage, and sale of energy and energy-related resources. Continue reading...
What is the Federal Trade Commission (FTC)?
The Federal Trade Commission (FTC) was originally created to encourage market competition and to protect consumers by breaking up monopolies and monitoring mergers and acquisition activity. It has now branched out into more areas in the pursuit of consumer protection and fair markets. The FTC is now comprised of three bureaus: Consumer Protection, Competition, and Economics. They protect consumers from fraudulent business activity and monopolistic business practices. Continue reading...
What are Federal Reserve Regulations?
The Fed has been commissioned with upholding the directive of the Federal Reserve Act. The Fed is technically an independent institution from the US Government, even though it works hand-in-hand with the Treasury Department on monetary policy issues. It functions partially as a self-regulatory organization for the banking industry, and the Regulations, which are named with letters of the alphabet, are meant to protect consumers, member banks, and the economy as a whole. The leadership of the Fed is comprised of both government appointees and private sector banking leaders. Continue reading...
What is Appraisal Fraud?
Appraisal Fraud is the intentional misrepresentation of the value of a home using an appraiser’s statement. Appraisals are necessary for large loans and real estate transactions, and appraisal fraud is common. Fraud can be committed in this manner by the appraiser or by a person falsifying an appraiser’s statement. A common example would be overstating the value of a home so that a borrower can get a larger home equity loan. Continue reading...
What is Lifestyle Inflation?
Lifestyle inflation is a term used in personal financial planning for the tendency of people to increase their spending and standard of living right along with any raises and monetary resources, even if it’s is at the detriment of any plans for debt reduction or long-term savings. Monetary inflation describes the phenomenon when more money has no more utility value than a lesser amount used to because the cost of goods is going up. Lifestyle inflation is when people select higher-priced goods and lifestyle spending habits when they have the money available to do so. Continue reading...
What is Real Rate of Return?
Real rate of return is a notion that takes factors such as inflation and taxation into account before reporting a realized rate of interest on an investment. Economic theorist Irving Fisher first popularized the idea that there is a difference between a nominal interest rate and a real interest rate. Consider a bond that pays a steady coupon rate of 2% for the next 10 years. If inflation is more than 2%, the real rate of return on that investment is negative. If the investor got taxed on the nominal gains, the real rate of return is pushed further into negative territory. Continue reading...
What are TIPS?
Treasury Inflation Protected Securities (TIPS) are coupon-paying treasuries issued by the US Government whose principal amount adjusts with inflation. When a consumer buys Treasury Inflation Protected Securities (TIPS), they experience a few benefits when compared to other investment options. One benefit is that the security is backed by the full faith and credit of the US Government. Another benefit is that the principal amount adjusts automatically for inflation with the Consumer Price Index. Continue reading...
Top Stocks for Stable Earnings Across Diverse Sectors
In the dynamic world of the stock market, where volatility often reigns supreme, a select group of companies stands out for their ability to consistently generate stable earnings. This remarkable group spans across various sectors, excluding utilities, and includes giants such as Microsoft Corp (MSFT), Eli Lilly & Co (LLY), VISA (V), JPMorgan Chase & Co (JPM), Mastercard (MA), Procter & Gamble Company (PG), Nike (NKE), Boston Scientific Corp (BSX), Altria Group (MO), and US Bancorp (USB). These companies, known for their unwavering performance, have become beacons of reliability for investors seeking growth amidst uncertainty. Continue reading...
Analysis of Top Consumer Electronics and Appliance Stocks
The consumer electronics and appliances sector is a dynamic and ever-evolving industry, significantly impacting the global economy. With the rise of 'smart homes' and high-tech gadgets, this industry is experiencing a surge in demand, offering substantial opportunities for investors. This article delves into the top three stocks in this sector, focusing on General Electric Company (GE), Best Buy Company (BBY), and Roku Inc. (ROKU). Continue reading...
The Best Water-Themed Stocks
Water, the most essential resource on our planet, presents a unique and compelling investment theme. This theme is not only fascinating due to its critical importance to life but also because of the diverse range of companies it encompasses. From consumer staples like National Beverage Corp., known for its LaCroix sparkling water, to utilities such as NiSource, and even technology-focused entities like Itron, which specializes in water usage measurement equipment, the water theme offers a broad spectrum of investment opportunities. This diversity means the sector's performance varies across economic cycles, with utilities and consumer staples generally offering stability during downturns, while technology-oriented firms may thrive in periods of economic expansion. Continue reading...
Rising Foods: Top Stocks to Watch
In the world of investing, there are various sectors and industries to explore, each with its unique characteristics and opportunities. One theme that has consistently shown promise and resilience is the rising foods theme. This theme encompasses companies that produce packaged foods, and it includes notable players like Kraft Heinz Company (KHC), General Mills (GIS), Tyson Foods (TSN), Campbell Soup Company (CPB), and Cal-Maine Foods (CALM). In this article, we will delve into the rising foods theme and explore why these companies stand out as top stocks to consider. Continue reading...
What Are Defensive Stocks?
The stock market is an ever-changing ecosystem, susceptible to the ebb and flow of economic conditions. Within this volatile environment, defensive stocks emerge as bastions of stability, offering investors a haven during tumultuous times. These stocks are the unsung heroes that maintain steady growth even as economic storms rage on. Continue reading...
Top Caffeine Stocks
In the realm of consumer staples, few sectors are as ubiquitous and resilient as the caffeine market. This segment, dominated by global giants like Coca-Cola Company (KO), PepsiCo (PEP), Anheuser-Busch INBEV SA/NV (BUD), and Starbucks Corp (SBUX), represents a fascinating intersection of consumer habit, brand loyalty, and economic elasticity. In this article, we will delve into the details of the most notable companies in this sector, exploring their market positions, financial health, and future prospects. Continue reading...
How Do You Navigate the Business-to-Consumer (B2C) Landscape?
Business-to-Consumer (B2C) is a prevalent sales model where businesses sell their products or services directly to individual consumers. This model stands in contrast to the Business-to-Business (B2B) approach, where transactions occur between businesses. B2C has evolved significantly with the advent of the internet, giving rise to e-commerce and transforming the way consumers shop. Continue reading...
What distinguishes Cyclical from Non-Cyclical Stocks?
Dive into the World of Stocks: Unveiling the Key Differences Between Cyclical and Non-Cyclical Stocks. Discover how economic fluctuations impact investments and learn to build a robust portfolio for financial success. Stay tuned for insights! Continue reading...