Bear Market Investing: Should You Really Buy Retail Stocks Right Now?
Things have been difficult for companies across sectors this year. But economic woes have hit retailers particularly hard. That's because higher inflation weighs on their costs such as transport and logistics -- and it weighs on their customers' wallets.
As a result, these companies' stock prices have suffered too. The SPDR S&P Retail ETF has dropped 36% this year. That's compared to a 23% decline for the S&P 500 Index. With this in mind, should you really invest in retail stocks right now? Is it too soon to get back into this hard-hit industry? Let's find out.
As mentioned above, rising inflation is a big problem for retailers. E-commerce giant Amazon (NASDAQ: AMZN), for instance, said international container shipping costs more than doubled from pre-coronavirus days to early this year. Companies are paying more to ship and store their goods. And that's hurting gross margin.
Source Fool.com
