Popular Posts
This holiday season retailers are gearing up for one of the worst years yet. They’ve read the news and know that unemployment is up, people are putting off large purchases, and we’re in the midst of a financial crisis. . These unfortunate facts are not only reflected in most retail store’s bottom lines, but also in stock prices. The Retail HOLDRs (AMEX: RTH) exchange traded fund (ETF) is showing a bit of an unexpected trend as it recently outperformed the market from its highs in September 2008.
It must be noted that the success of RTH is its share of Wal-Mart (NYSE: WMT), which is a full 26% of the holdings. RTH has done very well in the current economic environment as people are looking for the best deals across the boards. Year to date, RTH is down about 25%, compared to the S&P which is down about 40%. In fact, not only is Wal-Mart not following economic predictions for the retail market, but other retail stores may also see less decline or even growth in the coming weeks. This is not the first time predictions have been dire, and yet the retail industry ended up smelling like a rose.
If you feel the outlook is more doomsday than it needs be, or if you see that the situation is actually ripe for a retail rally, consider buying RTH, which not only holds significant stock in Wal-Mart but also includes well known and big retailers such as Target Corporation (NYSE: TGT), Lowes Companies (NYSE: LOW), Walgreen (NYSE: WAG), and Home Depot (NYSE: HD) among many other household names.It just may be that conditions are perfect for an upswing in retail activity and you can hedge that bet by investing in RTH, which costs a fraction of what a professional money manager would charge to select such well known and performing companies in this environment. Below you’ll find listed the top 10 holdings, representing about 85% of total assets, a strong combination of companies which people will seek out to find the best deals without drastically changing their lifestyles.
Sign Up for Our
Free Email Newsletter
