The financial sector has been one of the hardest-hit parts of the stock market during the COVID-19 pandemic. While the S&P 500 just reached a fresh all-time high, the Financial Select Sector ETF (NYSEMKT: XLF) is still down by nearly 20% for the year.
There are certainly some good reasons for the underperformance. There's tremendous uncertainty about how the economic effects of the pandemic will translate to loan defaults and charge-offs for banks. Plus, a record-low interest rate environment isn't exactly good for bank profitability.
That said, now could be a good time for patient long-term investors to put some money to work. Here's why I'm watching beaten-down bank stock Bank of America (NYSE: BAC) and recent IPO Rocket Companies (NYSE: RKT) as August comes to a close.
Source Fool.com