NEW YORK (ETF Expert) -- There are times when the broader U.S. market moves sideways. In the last five trading sessions, in spite of rally hype, U.S. stocks have essentially parked the S&P 500 bus in neutral.
In times like these, I often revisit all of my client holdings. Are there any underperformers that have not provided much in the way of diversification or income generation? On the flip side, do I own any assets that have dramatically exceeded respective price targets, where recognizing gains would raise cash for future buying opportunities?
Raising cash is a critical component of successful investing. I may look to prune portfolios so that there is 10%, 15% or 20% available for an inevitable pullback in prices. (Believe me, there are enough August-September headwinds to hamper a five-week rally's upward progression.)
Circumstances may dictate whether I buy the proverbial dip or wait for a technical bounce off a key trendline (e.g., 50-day moving average, 200-day moving average, etc.). Regardless, I am always evaluating prospects for my "wish list."One exchange-traded tracker that merits serious consideration on a selloff is Market Vectors Retail (RTH). In particular, it has demonstrated remarkable resilience in spite of ongoing economic uncertainty. Give credit to RTH's 10% weight in Wal-Mart Stores (WMT). Granted, some might regard a 10% weighting in any company as excessive. However, Wal-Mart has been nearly bullet-proof in both recessionary and expansionary environments. That fact has helped propel RTH to new price heights in August, Moreover, RTH has served up far greater relative strength than the broader S&P 500 over the last 12 months.
What makes RTH particularly special is its hybrid make-up, combining consumer staples standouts with consumer discretionary leaders. Wal-Mart, Costco (COST) and Sysco (SYS) may actually thrive in tough times, while shopping-happy Americans with money to spare may "indulge" at Whole Foods (WFM), Bed, Bath & Beyond (BBBY) or even Amazon (AMZN). Market Vectors Retail ETF pursues the price and yield performance of the Market Vectors U.S. Listed Retail 25 Index -- a rules-based index intended to give investors exposure to the largest brand-name retailers. Fundamentally speaking, the dividend yield as well as the price-to-book ratio are similar to that of the S&P 500.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV