What is consumer discretionary?
The term consumer discretionary refers to “a category of industries, made up of companies which deal with products or services that are not necessities,” according to InvestorWords.com. These non-vital goods and services sell according to fluctuating consumer demand.IndustriesThe Select Sector SPDRs website notes that the consumer discretionary sector includes industries, such as “automobiles and components, consumer durables, apparel, hotels, restaurants, leisure, media and retailing.”Discretionary IncomeSuch industries require consumers with ample discretionary income to spend. Investopedia describes discretionary income as “the amount of an individual’s income that is left for spending, investing or saving after taxes and personal necessities (such as food, shelter, and clothing) have been paid.”Discretionary InvestorsSince consumers typically spend more discretionary income in times of economic prosperity than in recessions, investors in consumer discretionary industries find thems
