New York, NY (PRWEB) October 06, 2012
In a recent Investment Contrarians article, financial expert George Leong contends that, while the Federal Reserve’s new monetary policy (QE3) was a reward largely for the upper echelons of income-earners, the Fed is also giving a boost to high-end luxury retailers.
With QE3 in place, the low interest rates mean cheaper cash will be available for the rich to make more money and finance spending, explains Leong. This means the rich, with their larger pool of capital, can continue to increase their net wealth at a faster rate than the average American, he reasons.
Citing the A.T. Kearney Wealth and Spending Study, Leong further explains that by increasing their net wealth, the top five percent will see a significantly higher percentage of discretionary spending.
“A viable strategy to play the QE3 effect is to first determine the benefactors of the policy in the retail sector: we know these benefactors will be the higher-income earners with major disposable income,” advises Leong.
The Investment Contrarians financial expert notes that such high-end luxury retailers as Saks, Coach, Tiffany’s, or Michael Kors have good potential to advance in the retail sector, especially given that QE3 will largely benefit the top five percent who control the majority of the country’s financial assets, along with those in the upper middle-class segment.
Michael Kors, in particular, is expected to benefit from the new monetary policy, says Leong.
He reports that Michael Kors is estimated to report sales growth of 36.9% in fiscal 2013 and 25.3% in fiscal 2014. (Source: http://www.MichaelKors.com.) The company also beat on earnings-per-share (EPS) estimates by 122% in its fiscal third quarter, Leong adds. (Source: Yahoo! Finance.)
“Based on the operating results, Michael Kors could be a special stock in the retail sector going forward,” concludes Leong.
To see the full article and to get a real contrarian perspective on investing and the economy, visit Investment Contrarians at http://www.investmentcontrarians.com.
Investment Contrarians is a daily financial e-letter dedicated to helping investors make money by going against the “herd mentality.”
The editors of Investment Contrarians believe the stock market and the economy have been propped up since 2009 by artificially low interest rates, never-ending government borrowing and an unprecedented expansion of our money supply. The “official” unemployment numbers do not reflect people who have given up looking for work and are thus skewed. They believe the “official” inflation numbers are also not reflective of today’s reality of rising prices.
After a 25- to 30-year down cycle in interest rates, the Investment Contrarians editors expect rapid inflation caused by huge government debt and money printing will eventually start us on a new cycle of rising interest rates.
Investment Contrarians provides unbiased research. They are independent analysts who love to research and comment on the economy and investing. The e-newsletter’s parent company, Lombardi Publishing Corporation, has been in business since 1986. Combined, their economists and analysts have over 100 years of investment experience.
Find out where Investment Contrarians editors see the risks and opportunities for investors in 2012 at http://www.investmentcontrarians.com.
George Leong, B. Comm., one of the lead editorial contributors at Investment Contrarians, has just released, “A Problem 23 Times Bigger Than Greece,” a breakthrough video where George details the risk of an economy set to implode that is 23 times bigger than Greece’s economy! To see the video, visit http://www.investmentcontrarians.com/press.