Rising confidence? Don’t miss out on these 4 stocks

Rising confidence? Don't miss out on these 4 stocks

These stocks look highly likely to benefit from sustained low interest rates and rising confidence.

Owen Raszkiewicz

Owen Raszkiewicz is a Motley Fool Contributor. Owen has been a Contributor since 2013, having also spent time as a Fool writer/analyst. He also worked as an Investment Analyst at Zenith Investment Partners, Australia's top research house specialising in managed funds. Owen has appeared on Channel 10's The Project and was invited on the BBC. He holds a Masters of Applied Finance, Masters of Financial Planning, Bachelor of Technology, Advanced Diploma of Financial Services and Diploma of Mortgage Broking Management. In addition, Owen has passed Level 1 of the Chartered Financial Analyst (CFA) Program. He has taken the Banking + Finance Oath (BFO). When he is not writing, Owen is Managing Director of Rask Finance, an Australian financial education company. You can email him: [email protected].

Published October 9, 2013 2:07 pm AEDT

Some investment advisors will tell you it's timing the market that's important, others will say its time in the market that will bring you greater gains. But why not have both?

Confidence is increasing. Yesterday the number of job advertisements rose for the first time in six months. This, along with a host of other good economic data, points to a strengthening economy in the next six months.

ANZ (ASX: ANZ) chief economist Ivan Colhoun said the number of job ads had moderated and any rise in the unemployment rate from here on will be "only modestly higher."

"The stabilisation in job advertising in September is consistent with other indicators of an improvement in consumer and business confidence in the weeks leading up to and immediately following the September federal election," Mr Colhoun said.

Investors can cheaply profit from confidence

Investors can take advantage of the strengthening economy in a number of ways. One way is to buy stocks that will, either directly or indirectly, benefit from increased sales revenue. Obvious examples include retail stores, advertisers and fund managers.

Three stocks that pay great dividends and are currently trading at modest prices are Nick Scali (ASX: NCK), Myer (ASX: MYR) and RCG Corporation (ASX: RCG), which owns and operates The Athlete's Foot Australia and wholesaler RCG Brands. Consumers benefit directly from things such as tax and interest rate cuts but also increasing job opportunities, as it encourages us to either spend more or save.

Retailers also stand to benefit from this trend but it's not a free ride to revenue gain. Businesses still need to advertise. Fairfax (ASX: FXJ) is one media stock that will welcome increased spending on advertising. The company has struggled to transition to digital media and this has resulted in big losses but the company is paying down debt and reacting to the market's demands.

Foolish takeaway

There are many stocks that stand to benefit from a rise in consumer and business confidence. High yielding stocks have continued to dominant the market in the past 12 months so why not have both?

We think we've discovered a stock that will benefit from rising confidence and better yet, it pays a fantastic dividend! Discover The Motley Fool's favourite income idea for 2013-2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of "The Motley Fool's Top Dividend Stock for 2013-2014."

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Motley Fool contributor Owen Raszkiewicz owns shares in Myer and RCG Corporation.

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