Investors are focused on retail sales today and the potential for a disappointment in total holiday spending, but a closer look at the longer-term trend in retail sales shows that the consumer isn’t actually rebounding at all. In fact, retail sales have increased less than 5% over the course of the 50%+ rally in stocks. Is this is a sign that retail sales are permanently moderating as consumers deleverage and become more prudent or is this simply a blip on the radar before spending zooms back to all-time highs? Equity investors are certainly betting on the latter.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.