Retail Sector Dangers

Retail Sector Dangers & Precious Metals

There is a tightening of consumer spending. Consumer spending can often be divided between necessities like food and water and discretionary items. When people have less money they buy fewer discretionary items. When consumers spend less money retailer suffer.

Most retailers have razor thin profit margins to begin with so if you have a tighter market and fewer sales you have store closings.

Sports Authority has declared bankruptcy.

There is a report McDonald is going to be closing 600 stores this year because of falling sales. When have you ever heard about McDonald closing stores? The story was always about them opening stores. I know they closed the store in my town.

Walmart is closing stores. When has a story about Walmart ever been about anything other than how it is an unstoppable colossus?

It's time for caution in the retail sector.

Put on trailing stops and stop loss orders because there is too much debt.

 Play it safe take some defensive strategies. Make sure you consult with your financial advisor.

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