Over 10 years we help companies reach their financial and branding goals. Maxbizz is a values-driven consulting agency dedicated.




411 University St, Seattle


Retail Stocks Hit New Highs – Investopedia

The SPDR S&P Retail Sector ETF (XRT) just made new all-time daily closing highs. I was going to write an extensive piece on how we got here and the lessons we can take away about knowing what we own and exercising professional skepticism when we hear gross generalizations like “retail is dying,” but I don’t think I even need to make it that complicated.
Here’s the example we typically hear from the journalists and analysts that are making the bearish retail case. Since 2007, Amazon.com, Inc. (AMZN) is up 5,170%, and J. C. Penney Company, Inc. (JCP) is down 97.5%. So that’s it. Case closed. Traditional retail is dead, so go out and buy Amazon and short the rest of the sector. Right? (See also: Amazon Captures 5% of All Retail Spending: Bloomberg.)
Well, if it were that simple, then the equal-weighted  SPDR S&P Retail Sector ETF wouldn’t be breaking out of a three-year base to new all-time daily closing highs.
[If you’d like to learn more about the tools that can help you succeed as a trader, check out my Technical Analysis course on the Investopedia Academy, which includes real-world examples and over five hours of video content.]
So what is the retail sector composed of exactly? A quick look at the fund allocation shows that there are 10 different industries represented here, and department stores like J. C. Penney are only 5.75% of the weighting.
So what’s my point? The index has 88 individual holdings, and since the bottom on Aug. 21, 2017, the average stock is up approximately 53.5% and the median is up roughly 39.50%, while 16 of the holdings more than doubled over that period. There were also 44 stocks that underperformed XRT and 14 stocks that were down over this period, so there was opportunity for stock pickers on both sides of the tape – you just had to look. Yes, there are industries that are struggling within the retail sector, but there also others that are thriving. However, that’s not unique to retail – there are leaders and laggards in every market at all times. (For more, see: 4 Retail Stocks Shattering Records Despite Amazon Threat.)
When it comes to market narratives, it's important to exercise professional skepticism and validate the claims being made by doing the work on your own. Quick soundbites might make you sound smart, but they rarely make you any money, which is why we're all here. So the next time you hear something that just doesn't sound right, I'd encourage you to do the work yourself, as there's likely an opportunity to take advantage of others' ignorance and/or laziness.
If you enjoyed this post, consider joining the All Star Charts community by starting a 30-day risk-free trial or signing up for our “Free Chart of the Week”.
Thanks for reading, and let us know if you have any questions!
Podcast Episodes
Podcast Episodes
Stocks & Bond News
Podcast Episodes
Podcast Episodes
When you visit the site, Dotdash Meredith and its partners may store or retrieve information on your browser, mostly in the form of cookies. Cookies collect information about your preferences and your devices and are used to make the site work as you expect it to, to understand how you interact with the site, and to show advertisements that are targeted to your interests. You can find out more about our use, change your default settings, and withdraw your consent at any time with effect for the future by visiting Cookies Settings, which can also be found in the footer of the site.



Joseph Muongi

Financial.co.ke was founded by Mr. Joseph Muongi Kamau. He holds a Master of Science in Finance, Bachelors of Science in Actuarial Science and a Certificate of proficiencty in insurance. He's also the lead financial consultant.