10 Best Stocks for 2014: #4, Financial SPDR (XLF)
Investor: John Jagerson and Wade Hansen
YTD Return: +3%
The banking sector has been choppy in 2014, particularly after the results of the recent Federal Reserve stress tests.
On the plus side, the vast majority of banking stocks won regulators’ stamp of approval and even were granted dividend increases. Then there were a few dogs like Citigroup (C), which failed to pass muster and sold off sharply as a result.
On balance, then, the financial sector hasn’t gone much of anywhere this year despite some big winners and a few big losers. That has kept John Jagerson and Wade Hansen, editors of SlingShot Trader, from posting breakout gains even if they have managed to slightly outperform the market with their call on the Financial SPDR (XLF).
The XLF banking ETF is a great diversified play for long-term investors. But of course, while that diversification means you have a position in a number of high fliers like Bank of America (BAC), which is up by more than 8% since January, you also have a stake in the losers like Citi, which has given up almost 10% in the same period.
Still, if you want to play a cyclical recovery in lending and economic growth, there’s no better place to park your cash than bank stocks — and no better way to play the sector broadly than XLF.