About a year ago, I warned about getting overly excited about the Black Friday hype (see Is Black Friday the time to sell the Retailers?). I had identified a seasonally weak pattern for retailing stocks in December. Hype about Black Friday retailing results didn`t help investors in these stocks either.
Sure enough, retailing stocks exhibited a pattern of outperformance into late November and then dropping off in December last year, as shown by the chart of the relative performance of SPDR S&P Retail (NYSE:XRT) to SPDR S&P 500 (ARCA:SPY):
A glance at the seasonal, relative return pattern for retailing stocks showed that they tended to underperform the market in December.
I reiterate my warning again this year. If you want to go shopping this Black Friday, I suggest that you don`t buy retailing stocks.
Cam Hui is a portfolio manager at Qwest Investment Fund Management Ltd. ("Qwest"). This article is prepared by Mr. Hui as an outside business activity. As such, Qwest does not review or approve materials presented herein. The opinions and any recommendations expressed in this blog are those of the author and do not reflect the opinions or recommendations of Qwest.
None of the information or opinions expressed in this blog constitutes a solicitation for the purchase or sale of any security or other instrument. Nothing in this article constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. Any purchase or sale activity in any securities or other instrument should be based upon your own analysis and conclusions. Past performance is not indicative of future results. Either Qwest or Mr. Hui may hold or control long or short positions in the securities or instruments mentioned.