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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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  • George C

    I’ll give you a post. Expect disappointing retail sales for Q4 as economic concerns continue. Look at all the economic data and you’ll see very mixed signals.

    Next time you’re at your own local financial institution, check out their annual report. Notice that deposits are up, lending is down, and consumers saving their money. That’s your biggest indicator on what consumers really think about this economy.

    More Layoffs, more job insecurities, lower sales, higher food prices, gas prices pretty much staying way to high. Nothing is going to change and more debt out of DC is not going to help matters. 15T in spending since ’08 didn’t create real growth and another 13 or 15T in four more years won’t do it either.

    This is our future for the next four years unless we see a more business friendly change out of Washington.