Consumer Discretionary

AAA

DEFINITION of 'Consumer Discretionary'

A sector of the economy that consists of businesses that sell nonessential goods and services. Companies in this sector include retailers, media companies, consumer services companies, consumer durables and apparel companies, and automobiles and components companies.

INVESTOPEDIA EXPLAINS 'Consumer Discretionary'

It is possible to invest in all the consumer discretionary companies at once by purchasing shares of a consumer discretionary mutual fund or exchange-traded fund such as Vanguard's Consumer Discretionary ETF. This sector performs better when the economy is doing well. Consumer discretionary is the opposite of consumer staples, which consists of businesses that sell necessities like food and drugs.

RELATED TERMS
  1. Search Cost

    The time, energy and money expended by a consumer who is researching ...
  2. Consumer Reports

    An evaluation of a new product, or a comparison between products, ...
  3. Lipstick Effect

    A theory that states that during periods of recession or economic ...
  4. Big Ticket Item

    Big ticket items are high-value items, such as houses and cars, ...
  5. Consumer Goods

    Products that are purchased for consumption by the average consumer. ...
  6. Consumer Spending

    The amount of money spent by households in an economy. The spending ...
RELATED FAQS
  1. What are the most common ETFs that track the automotive sector?

    The most frequently traded exchange-traded fund (ETF), The First Trust Nasdaq Global Auto (CARZ), is an index of automotive ... Read Full Answer >>
  2. How do waivers, reimbursements and recoupments affect a fund's expense ratio?

    Waivers, reimbursements and recoupments can initially serve to keep a fund's expense ratio lower than it would be otherwise. ... Read Full Answer >>
  3. What are some popular mutual funds that give exposure to the drugs sector?

    The pharmaceutical industry has experienced outstanding growth in the 10 years leading up to 2015, consistently outperforming ... Read Full Answer >>
  4. What can cause the rate of return to be negative?

    Several factors can cause an investment to have a negative rate of return. Poor performance of a company or companies, turmoil ... Read Full Answer >>
  5. What information should I focus on in my mutual fund's prospectus?

    The U.S. Securities and Exchange Commission (SEC) requires investment companies to provide potential and current investors ... Read Full Answer >>
  6. How can I get a free mutual fund prospectus?

    Mutual funds are sold via prospectus, as mandated by the Securities Act of 1933. The prospectus document outlines many features ... Read Full Answer >>
Related Articles
  1. Economics

    Understanding The Consumer Confidence Index

    We look at this closely watched economic indicator to see what it means and how it's calculated.
  2. Retirement

    Consumer Confidence: A Killer Statistic

    The consumer confidence is key to any market economy, so investors need to learn the measures and how to analyze them.
  3. Options & Futures

    The Consumer Price Index: A Friend To Investors

    As a measure of inflation, this index can help you make key financial decisions.
  4. Mutual Funds & ETFs

    Pros & Cons Of Bond Funds Vs. Bond ETFs

    Understanding the pros and cons of bond funds and bond ETFs will help you choose the instrument that is best for building your diversified bond portfolio.
  5. Mutual Funds & ETFs

    How Janus Capital Makes Money

    Before investing in Janus, it is prudent to understand how it makes money and what costs detract from shareholder wealth.
  6. Professionals

    Mutual Funds: How Many is Too Many?

    How many mutual funds are too many when it comes to a well diversified portfolio?
  7. Investing Basics

    Understanding Redemption

    In the investing world, redemption refers to cashing out the value of bonds or mutual funds.
  8. Mutual Funds & ETFs

    How To Mimic A Hedge Fund Strategy

    Hedge fund replication strategies are beneficial to individual investors who would like hedge fund-like returns without the drawbacks.
  9. Investing Basics

    What is an Index?

    An index is a statistical means of calculating a change in an economy or market.
  10. Mutual Funds & ETFs

    At Look at REITS vs. Real Estate Mutual Funds

    REITs and real estate mutual funds have their differences, but they both offer liquidity and easy access to diversified real estate assets.

You May Also Like

Hot Definitions
  1. Geometric Mean

    The average of a set of products, the calculation of which is commonly used to determine the performance results of an investment ...
  2. Fisher Effect

    An economic theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and ...
  3. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  4. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  5. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  6. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
Trading Center