Profile image
By ETF Daily News (Reporter)
Contributor profile | More stories
Story Views

Last Hour:
Last 24 Hours:

Buy This Retail ETF Before The Holidays

Friday, November 4, 2016 4:17
% of readers think this story is Fact. Add your two cents.

retailAnalyst Moby Waller writes about an interesting strategy to beat the S&P 500 through the end of the year using a certain retail ETF.

Don’t wait until the last minute to buy retail stocks.

I’ve uncovered a little-known calendar trend as we head into the holidays that can give you a leg up.

Acting right now could help you beat the S&P 500 in November and avoid a January pitfall. The best part is that you can do it quickly and easily using a low-cost ETF trade.

Retail stocks are heavily influenced by the Christmas and holiday shopping season.  In fact, 20% to 40% of a retailer’s annual sales can occur just during November and December.

You’ve probably heard the adage, “Buy the rumor, sell the news.” In this case, it has been holding true:Buy retail stocks now, ahead of the holidaysand sell them before January. 

Don’t Miss the Gains

If you wait until AFTER the Black Friday and Christmas sales results are reported, the gains are likely already gone. Get your “holiday shopping” trade done EARLY, well before the Champagne pops for New Year’s and these stocks tend to come back down. 

I analyzed data on the most well-known liquid retail ETF, SPDR S&P Retail ETF (NYSE:XRT) and found some interesting results:

The beginning of the Christmas holiday season (November) has been a good time to buy the group, and the post-shopping season (January) has been a good time to avoid (or be short) the sector.

XRT has outperformed the market in November with an average gain of 2.26% in that month alone.  In addition, XRT has lost an average of 1.87% during January in the period examined (2006, 2009 to 2015). December has been a relatively neutral month for retail stocks compared to the S&P 500.

Compared to the S&P 500 ETF (NYSE:SPY), XRT has beaten the market by 26% in November : +2.26% compared to +1.79%.  Moreover, its January losses are more than double those of the S&P 500.

It’s worth noting that with the XRT, you won’t be stuck in 100% “brick-and-mortar” companies. That’s because XRT holds online retailers such as Netflix (NASDAQ:NFLX) and (NASDAQ:AMZN).  This ETF tracks the S&P Retail Select Industry Index, and is equally weighted among nearly 100 stocks.


Above is a monthly chart of XRT since it was introduced in 2006. But we’re not concerned about the long-term big-picture outlook on the ETF right now.

Instead, we’re more interested in earning some profits in the next few months.

If you’re bullish on the 2016 holiday shopping season, history says to buy retail stocks in late October or early November. And be sure to exit your trade by the end of November or December.

This article is brought to you courtesy of Wyatt Investment Research.

You are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (


We encourage you to Share our Reports, Analyses, Breaking News and Videos. Simply Click your Favorite Social Media Button and Share.

Report abuse


Your Comments
Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

Top Stories
Recent Stories



Top Global

Top Alternative



Email this story
Email this story

If you really want to ban this commenter, please write down the reason:

If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.