Tom Reese/Paul Rubillo, Dividend.com
After decades of free spending and living beyond their means, Americans are beginning to change their spending patterns.
According to some recent research surveys, consumers in America are just beginning to show an enthusiasm for thriftiness. This may not be good news for companies that are relying on shoppers to continue to purchase high-end products. Companies like Polo Raplh Lauren (RL), Coach (COH) and Nordstom Inc. (JWN) have seen their shares in extreme decline over the past 12 months.
Some of the areas that people are cutting back, according to survey research, is deciding to wait on buying a new car. You can see that trend in the monthly auto sales for Ford (F), General Motors (GM), and Toyota Motors (TM). Also, consumers are cutting back on vacation spending, which has hit companies like Disney (DIS) and lodging outfits like Marriott (MAR) and Starwood Hotels (HOT).
The Bottom Line
As consumers tighten their belts, personal balance sheets will slowly start to show signs of improvement. Let's hope that the government doesn't try to induce consumers back off the smart road by encouraging them to spend money on flat-screen TV's and designer clothes.
Note: None of the stocks mentioned above are on our "Recommended" list at this time.
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