Consumers Show Resilience, and the Gurus Reap the Benefits

Throughout the Great Recession and the ensuing turnaround that began in mid-2009, many analysts and pundits have said not to expect the economy to get much help from the U.S. consumer. Hamstrung by debt and at the mercy of a weak job market, Americans are going to save more and spend less, the theory goes. And weak consumer spending — which makes up about 70% of the U.S. economy — will mean weak overall growth for the country.

But in recent months, the U.S. consumer has shown surprising resiliency. According to the Census Bureau, retail sales have risen in each of the past two months, and now stand close to 7% off their December 2008 lows. Some of that is due to bounce-backs in the price of gas and fuel, but other more discretionary-type areas are also well off their lows, including clothing stores; sporting goods, hobby, book, and music stores; and electronics and appliance stores.

That strength has been a boost for a number of retail-related stocks, and John Reese’s models have done particularly well in that arena. As part of his new Validea Professional product, Reese tracks a number of industry and sector portfolios picked by his Guru Strategy computer models. Over the past month, his 10-stock Retail portfolio has been his best performer, gaining more than 14% — close to three times the gains of the S&P 500.

Reese’s Retail portfolio also had a stellar 2009, gaining 61.2% vs. the S&P’s 23.5% gain. Right now, it’s particularly high on apparel retailers, which make up half of the portfolio. Here’s a look at all of its holdings, which include big recent winners like Ross Stores (up 23.4% since Jan. 22) and The Buckle (up 25.1% since Dec. 24).

Validea Professional 10-Stock Retail Portfolio
Validea Professional 10-Stock Retail Portfolio

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