FYI: The average consumer staples mutual fund weathered the 2007-09 bear market much better than the average consumer discretionary fund.
Soap and razor blades, the stuff of consumer staples, are must-haves even if the stock market is slumping, while fancy clothes, expensive restaurants and a new room for the house are often trimmed from budgets of consumers exercising their discretion in such times.
If instead of buying a new car on Dec. 31, 2004, you'd instead plopped $10,000 in the average consumer staples mutual fund, you'd have enough to buy $27,103 of laundry detergent and vacuum cleaner bags, according to Morningstar Inc. performance data. Well, maybe a nice vacation or two for the family, too.
If you'd invested the same amount in the average consumer discretionary fund, you'd have enough to buy a $21,996 car. The starting sum invested in the S&P 500 would have grown to $21,093.
Regards,
Ted
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