Opinions
Stan Wong
SPDR Retail ETF
XRT-N
COMMENT
Sep 13, 2012
Stock price when the opinion was issued
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Most investors will get into the retail sector just before Black Friday. As a seasonal investor, you want to get in before and then when they get in you get out. Seasonal trend is shorter and lasts from now until basically November 29, Black Friday. You are looking at over 85% rate of return and has been up about 83% of the time. Strong trend, but short.
This is a retail ETF. Well diversified by holding approximately 1% in each of the retail companies. This is the time of year when you want to be in retail stocks, because the big event for retail is Black Friday, and you want to be in about a month ahead of time, and you want to Sell at about that time. Last year the retail sector underperformed right after Black Friday.
Retail did not do well in the fall, but then in January there were some good numbers that came out. Seasonally retail tends to do well from January 21 into April 12. During that time it has been 8.5% positive 77% of the time since 1990. More importantly, it has outperformed the S&P 500 81% of the time. The chart shows a double bottom and the stock has now broken above its resistance level. Once you have broken above that, it is very positive.
The problem with REITS is that they're sensititive to rising interest rates, and nowadays they're rising. But at the end of the cycle, investors like real estate, so this ETF looks attractive. A tip: some REITs are similar, so you can sell one for a tax loss and buy a similar one to keep playing the same space. (You can't re-buy the same REIT within a certain amount of time.)
Likes the retailers because he thinks the consumer still has legs. The one thing he doesn’t like about this one is that it is equal weighted so you are getting a lot of smaller cap names in that portfolio. He would prefer HOLDRs (RTH-N) which is market weighted.