Play the Recession with This Bargain Stock Fund
This post is part of a regular series written by ETF Trends editor Tom Lydon, special for CNBC.com.
As this recession took hold and deepened, consumer attitudes shifted along with it so much that The Economist wondered recently if the change would be a permanent one.
Among some of the factors that can be viewed as evidence of this change include:
-Coupon redemptions in the first quarter are up 17 percent over a year ago, and sites that list deals and coupons are becoming more popular
-The savings rate is rising and people are living within their means
-While there’s been an increasing interest in “green” products, consumers are placing a premium on value – they won’t pay just anything to save the planet
Check out the earnings by discount retailers, who have continued to exhibit strong performance in the recession: Family Dollar reported a 33 percent earnings jump in its second fiscal quarter ended March 1; Wal-Mart same-store sales rose 1.4 percent in March
Will it stick? Will we forever be a nation of savers and frugal spenders, living within our means? Only time will tell. But in the meantime, investors can capitalize on our national demand for values and bargains with the SPDR S&P Retail, which is up 19.1% year-to-date.
XRT’s top holdings are made of up some of the biggest names in value-focused shopping, including: Carmax, Netflix, Family Dollar, Expedia and Supervalu.
Disclosures:
Some of Tom Lydon’s clients own XRT.
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Tom Lydon is the editor of and author of iMoney: Profitable ETF Strategies for Every Investor.