Take Advantage Of The Retail Sector's Historical Black Friday Strength With These Stocks, ETFs

Thanksgiving week has historically been a good week for U.S. investors and an even better week for the retail sector. This year, the retail sector has lagged during Thanksgiving wee, but history suggests the ball could get rolling in the right direction for retail investors in the week ahead.

The National Retail Federation estimates that at least 164 million Americans are at least considering shopping this holiday season, making November and December critical months for the retail industry.

Holiday Cheer

The SPDR S&P 500 ETF Trust SPY finished the holiday-shortened week up 0.8 percent, while the struggling SPDR S&P Retail (ETF) XRT dropped 0.6 percent.

Overall, this Thanksgiving week was even better than average for U.S. investors. Since 1945, the S&P 500 has delivered gains 75 percent of the time during Thanksgiving week for an average return of 0.6 percent.

The Retail Trade

Over the past 10 years, S&P 500 retail stocks have returned an average of 5 percent during Thanksgiving week and the week after, according to CNBC. That return is even better than the overall 3 percent return of the S&P 500. In fact, since 2007, S&P 500 retail stocks have never generated a negative return during that two-week stretch.

For investors looking for a way to bet on retail stocks this holiday season, here are several popular ETF options:

• SPDR Retail ETF
• Direxion Daily Retail Bull 2C Shares ETF RETL
• Amplify Online Retail ETF IBUY

Buyer Beware

One thing retail investors should watch out for headed into the end of 2017 is tax loss selling among popular stocks. Another strong year for the market suggests investors will be looking to sell some of the worst-performing stocks to offset their gains before the end of the year. Macy’s Inc M, J C Penney Company Inc JCP and Sears Holdings Corp SHLD and other retailers are all big losers in 2017 and could be prime targets for tax-loss selling.

Related Links:

Wage Pressures And Holiday Comps In The Retail Sector

Walmart's Crazy Christmas Plans

Brokers for ETFs