The S&P 500 consumer staples index has continued to soar. Since a peak in economic growth and the potential for higher market volatility puts downward pressure on cyclical sectors, consumer staples’ earnings profile and defensive approach could give your portfolio a lift.
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Why else should you invest in consumer staples? Besides the ho-hum ongoing discussion about the fact that consumer staples are important for portfolio diversification, stocks in this sector tend to offer steady growth, solid dividends and low volatility, particularly in the face of high inflation, which we’re experiencing right now. Some sectors generally perform better than others if inflation rises — ahem, enter consumer staples.
Even if they’re less fireworks-like than more exciting investments (more like sparklers that sputter and die out) you can think of consumer staples as a lifeboat in a storm. Let’s work through the…