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How to Play Fed Volatility: Stick With Consumer Stocks, Says Gardner


Tom Gardner of the Motley Fool has a controversial take on the FOMC and Ben Bernanke's handling of the U.S. economy. "I think they've got things pretty well under control," Gardner boldly asserts in the attached video.

Heading into Wednesday's critical Fed announcement and Bernanke press conference the investing world is poised to freak out in general over modifications to the existing quantitative easing (QE) program. Since the end of May every stock market gyration has been attributed to "traders" either thinking QE tapering is upon us (bearish) or likely to go on forever (bullish).

Gardner understands the obsession with the economy in light of the wild volatility of the last decade, but thinks it's time for investors to consider the possibility that the U.S. is at long last in recovery mode. Economic growth would go a long way towards muting the impact of Fed actions.

"We're coming to a place where wages are going to rise, where we're going to start seeing jobs coming back and I think it's a good time for the consumer going forward in the U.S.," Gardner says. That sanguine view leads him to the conclusion that consumer facing companies are going to continue their run.

"Every ten years there's a rotation in the asset that's most attractive," Gardner says. For the last decade the asset of choice was gold. "The last ten years for equities has been pretty flat. I think it's going to be a great ten years for stock investors."

For those looking for stock picks, go consumer with strong leadership. He likes Starbucks (SBUX), Chipotle (CMG), Whole Foods (WFM), and Amazon (AMZN).

Check out the attached video for more of Gardner's thoughts including his Must Read shareholder letter for those looking to invest along side a great leader (hint: it's not from Warren Buffett).

***Programming Note: Wednesday June 19th, be sure to catch our live multi-platform coverage of the Federal Reserve's biggest policy meeting this year, right here on Breakout!

2:30pm: Analysis begins with a live stream Fed chief Ben Bernanke's press conference, with live blogging from Yahoo! Finance's team of Jeff Macke, Matt Nesto, Aaron Task, Michael Santoli, Lauren Lyster, Rick Newman and more.

3:15pm: The show goes on-air live with full analysis of the FOMC statement, Bernanke presser, and all of the day's market action. Special guests include Peter Schiff of Euro Pacific Capital, James Paulsen of Wells Capital Management, and Jeff Kilburg of KKM Financial.

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