Strategies

Consumer Linked Income Portfolio

A History of Rising Earnings

That May Translate into a Rising Retirement Income for Life.

The fundamental products that make up consumer staples, such as toilet paper, soft drinks, toothpaste, detergent, cigarettes, cereal and snacks are often purchased on a monthly, weekly or even daily basis and consumed daily. Because these are products that we generally can’t live without, demand tends to be more consistent and much less cyclical than in durable/discretionary product areas like automobiles, appliances, apparel and home furnishings. Although consumers may consume their supplies before repurchasing, or cut down modestly on consumption, demand is relatively stable because of the frequent use of these products.

Big ticket items are generally the first thing to be put on hold in the event of an economic squeeze, but the relatively low price point of consumer staples are typically less of a target for household budget cuts. Most of these products are used globally, and as a result they are not dependent on one geographic area for success and may provide a lower volatility exposure to emerging markets.