In comparison to other nations, the United States holds a lot of first places. Although we complain about having some freeloaders milking the system that is designed to charitably help those who cannot help themselves, we work very hard in terms of hours worked and relatively few weeks of vacation as compared with Europeans for example.
However, I doubt anyone will ever hold a candle to us in terms of our determination to shop, buy and consume stuff of all kinds. I remember that in the 1960s we had blue laws to make sure people had Sunday off for worship and recreation. Even the grocery stores regularly closed at 8 or 9 o’clock and department stores were only open past 6 perhaps one night during the week. In Europe where the governments still know best for folks, that is still the norm. They want production, not consumption.
This fact about us is one of the reasons economists are schizophrenic about the new trend toward greater savings rates during this post-meltdown period. On one hand, they decry the lack of savings and investment for our future. On the other, they say we cannot get people back to work unless we spend, spend, spend.
But many folks of all ages have gotten serious about cutting their personal debt. This counts as savings too because it increases net worth.
In spite of blizzards and savings, Americans are spending again and this will continue to keep us on pace for a good economic recovery. Fewer vehicles were sold last month since it is hard to see cars under a foot of snow and ice. But other retail sales rose again, more than 7 percent higher than the average of the fourth quarter of 2009.
This is not only good news for future employment trends, but you have a great opportunity to invest in those companies that profit from growth of retail sales. Even though total sales are back to their levels of early 2008 (before everyone had the stuffing scared out of them), there is plenty of room for further growth.
The stocks of every one of the 46 apparel stores in my database are higher than they were 30 days ago, 40 of them by double digits. Of 107 in specialty retail, only seven stocks are lower through yesterday. The leapers, all more than 40 percent higher, include Coldwater Creek, Zale Corporation, Borders Group Inc. and Zumiez Inc.
Exchange traded funds offer broad diversification of companies but still allow a concentration in this sector. Start with the major sponsors of ETF’s: First Trust, PowerShares, ProShares, Rydex, SPDR, Vanguard and iShares. Look for terms such as consumer goods, consumer discretionary or retail. The fund known as SPDR S&P Retail ETF, symbol XRT, has risen by 16 percent since its February low on the 8th. (Neither Stewardship Capital Ltd. nor its clients own any of these stocks or funds mentioned.)
