We Need to Act Cautiously With Retail Stocks

Since the pandemic, the retail sector has been a real bright spot for investors. Those that quickly adapted to changes in consumer tastes and shopping preferences have not only survived the pandemic but thrived. With omnichannel and online shopping now driving growth, investors have been rewarded as well.

But so far, the new year has been less than ideal for retailers.

Thanks to inflationary pressures and the fear of recession, consumer spending is way down. And so are retail stocks. The question for investors now is whether or not the sector represents a value or a value trap.

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