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Consumers Could Make 2013 a Breakout Year for Stocks

Good news, all your Black Friday gawkers! The mall is going to be an absolute mess — chock full of deal-frenzied shoppers, eager to open their wallets and throw around more money than Sheldon Adelson at a GOP fundraiser.

What? Too soon?

Anyway here’s the skinny on the consumer front — and why it bodes well for investors and businesses in 2013:

In short: Bring on Santa!

There still is some big-time trouble out there, to be sure — from an ugly earnings slowdown and political gridlock over the fiscal cliff in America to geopolitical unrest in the Middle East to Europe’s disastrous debt situation. This has admittedly weighed a bit on business sentiment.

But as GDP numbers showed last quarter, a stronger attitude from consumers helped pull the economy forward … at a sluggish pace, but at least forward.

And in the longer-term, a consumer-led recovery is the most practical kind of recovery. What, you think that businesses hunkered down in “efficiency mode” are going to willingly take a stab at growth without a clear sign of recovery? Not happening. Consumers have to blink first. A sustained spending push that fills up their coffers will be the only thing to change CEO attitudes.

Consumer spending is volatile, of course, and a big shock in the form of higher gas prices or a housing double-dip or a stock market crash could change things.

However, all signs are clearly pointing up. And the longer they do so, the more sustainable a rally in 2013 will be.

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Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at editor@investorplace.com or follow him on Twitter via @JeffReevesIP. As of this writing, he did not own a position in any of the stocks named here.

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