Are you an investor that is looking for a sector with dynamic and rapidly growing stocks to invest their money in? If so, then the Consumer Discretionary sector of the S&P 500 is the perfect choice. Represented by leading companies such as Amazon, Home Depot, and Tesla, the Consumer Discretionary Consolidation holds key importance within the U.S. economy.
The S&P 500 Consumer Discretionary Index is comprised of the 83 stocks of companies in the consumer goods and services industry. According to research done by the Strategy, Consumers, and Markets Team from Goldman Sachs, this sector is on a trajectory of explosive growth. As of June 30, 2020, the sector has seen a year-to-date gain of approximately 28%, making it one of the best performing sectors within the S&P 500.
So why is the S&P 500 Consumer Discretionary Index such an attractive option for investors looking for fast-growth opportunities? The primary reason for this sector’s success is driven by the consumer’s confidence in the economy. With consumer sentiment so high, spending on items such as apparel, entertainment, and travel is on the rise – all of which significantly adds to the growth of the sector. Additionally, consumer e-commerce has surged during the pandemic, with many of the stocks in the Consumer Discretionary sector, such as Amazon, experiencing astronomic returns.
The Consumer Discretionary Index also has the potential to outpace the broader S&P 500 benchmark. According to Evercore ISI research, this industry has scored significantly higher on strategic benchmarks set by the U.S. economy. After a year of stick markets, these companies have been able to quickly adapt, and this overall has helped boost their performance.
The S&P 500 Consumer Discretionary Index is certainly worth considering for investors who are looking for growth potential in their investments. With the consumer sentiment increasing, corporations quickly adapting to unforeseen changes and buying behavior, and many strong companies making up the sector, this index stands to outperform the S&P 500.