The Wall Street crowd was pretty surprised when the Commerce Department reported that Americans pulled back on spending in July. Retail sales numbers for July came in at a disappointing 0.0%. That was well below the 0.4% Wall Street had expected.
People are piling up huge amounts of new debt in two areas: auto and student loans.
Outstanding car loans and student loans have climbed to $1.1 trillion and $1.4 trillion, respectively. And both are record highs.
Here’s how to profit from the current trend in debt growth
Those debt-growth numbers are troubling.
But, there’s a silver lining for investors. Here are three areas to invest in right now:
Lenders: The flipside of that explosive debt growth is to be a lender. Nobody likes to make loan payments, but I don’t know anybody who doesn’t like to receive them. Companies that are doing a lot of the lending are:
SLM Corporation (SLM) also known as Sallie Mae
Santander Consumer USA Holdings (SC), one of the largest auto lenders in the US
Capital One Financial Corp. (COF), one of the largest credit card issuers in the US
Discount Retailers: Cash-strapped consumers may not be spending as much as they used to… but when they do, they spend their dollars where they get the most bang for their bucks. I’m talking about discount retailers like:
Wal-Mart Stores Inc. (WMT)
Dollar General Corp. (DG)
Costco Wholesale Corp. (COST)
Debt Collection: Debt collectors may rank up there with used-car salesmen and IRS agents, but the business of debt collection is very lucrative. There are three publicly traded companies that get the bulk of their revenue from debt collection:
Asta Funding (ASFI)
Encore Capital Group (ECPG)
Portfolio Recovery Associates (PRAA)
As always, timing is everything. But, the companies listed above should prosper from financially stressed-out consumers.
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Dynamic Wealth Research was founded on the principle the world is changing at an ever-increasing pace. The greatest profit opportunities an investor will ever find are from massive, sweeping changes. Dynamic Wealth Research analyzes and closely follows these changes, keeps its readers on the leading edge of them, and shows you how to be best positioned these anxious, interesting, and ultimately profitable times.
