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From the March 2020 lows, the S&P 500 is up more than 100%, home prices according to the Case-Shiller Index are up 19%, and the commodities index is up 47%. There have even been spillover effects into more speculative asset classes like cryptocurrencies and collectibles. Although certain parts of the economy continue to struggle as evidenced by a recent Pew poll showing that 5.6% of Americans are behind a cumulative $20 billion on rent.
Given the continued economic pain, it’s likely that the Federal Reserve will be very slow in removing its accommodation. Two beneficiaries of these circumstances are the 1% who own 40% of the country’s wealth and luxury stocks which thrive when wealthy people are feeling flush and willing to spend more extravagantly. Therefore, investors should consider buying Movado Group Inc. (MOV), Signet Jewelers Limited Common Shares (SIG), and Hugo Boss AG (BOSSY).
