It’s that time of year again. With Thanksgiving here, the mad dash of holiday shopping season kicks off in earnest this weekend. While the holidays are the time of year where retailers make most of their money, it has historically been a time of year where investors in retail stocks underperform.
The chart to the right compares the relative strength of the S&P 500 Retail Group to the S&P 500 this year to a composite of its typical pattern going back to 2000. Looking at the chart, the Retail group’s relative performance this year hasn’t exactly followed the typical pattern. Whereas, the group typically outperforms steadily from the start of the second half of the year through Thanksgiving (red dot), it tends to give up some of that ground as the year comes to a close. Even this year, where the typical pattern hasn’t held, we have seen a big jump in relative returns in the post-election period. Will the typical pattern hold, or will the big surge in Consumer sentiment in the post-election period turn the tide. We covered all of this and more in our most recent B.I.G. Tips report, including a look at the retail related stocks that typically perform best from Thanksgiving through year end.
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