Investing pros and cons consumer discretionary sector has

Consumer discretionary sector has posted 8% gains in Q2, aided by strong retail sales data. The "investing pros and cons" highlight high-margin growth opportunities, with the downside risk from household debt accumulation. The fabric is a blend of 52 percent polyester and 48 percent cotton. Personally, I prefer textiles that are over 50 percent cotton. That said, the polyester likely contributes to the blanket’s durability and longevity, which is crucial when buying a product you’ll use daily. VILLALON: Not having all of your eggs in one basket is a great way to build a portfolio that's likely to hold up better. WOODS: Diversification also means investing in lots of different industries, plus lots of countries. Maybe one year, the U.S. goes into recession, but Japan doesn't. Diversifying which countries people invest in would protect against losing a chunk of their savings. VILLALON: Diversification is famously or maybe infamously called the only free lunch in finance. MA: And the free lunch is this - you've heard the expression, higher risk, higher reward. And that is basically how markets work. Riskier industries, riskier countries, more chances to lose, but possibly a better return on investment when things go well. Now, if someone is diversified, they can still get some of those higher rewards while being insured. So if one company fails, another might do well. So it's a low-risk, high-ish reward, but there is a cost. VILLALON: Psychologically, mentally, the lunch may be free, but it's not easy to consume. MA: I mean, yeah, it's like you could have a perfectly balanced, healthy lunch, but is it really as fun as just, like, housing an entire bag of chips? WOODS: Yeah, a bag of chips is pretty easy to wolf down. MA: (Laughter). WOODS: And so what he's saying is that when an investor has a diversified portfolio, there can be this kind of FOMO. Well, Dan says those thoughts can tempt investors away from diversification. And that brings us back to why it's particularly tempting now to stick with only U.S. stocks, even though Dan cautions otherwise. VILLALON: The U.S. has become pricey, and other markets, you know, even though they are less loved, may be offering a better deal over the next five to 10 years. I would never say, you know, to get out of a market altogether, but I would use that as an encouragement to get folks to diversify a little better across all. MA: In some ways, if someone's been heavily investing in U.S. tech stocks recently, it must feel like they've stumbled upon a gold mine. So why would they pack up and explore elsewhere? WOODS: Leaving when the party is just getting good can be hard, but Dan says it can be wise to have other options for when things start to get messy. Darian Woods. MA: Adrian Ma, NPR News. (SOUNDBITE OF MARCOCA'S "MIDNIGHT DIVE") Copyright © 2025 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information. Accuracy and availability of NPR transcripts may vary. Transcript text may be revised to correct errors or match updates to audio. Audio on npr.org may be edited after its original broadcast or publication. The authoritative record of NPR’s programming is the audio record. Agriculture commodities-linked stocks gain from drought-driven price rises. The "investing pros and cons" show potential for commodity-linked profits, yet production risks from unpredictable climate events.