The last time I wrote about Rite Aid Corporation (NYSE:RAD) was August 18. At the time, Rite Aid stock was trading around $2.20. In the three weeks since it’s managed to rally 14%.

Is $4 around the corner? I doubt it, but that hasn’t stopped the speculators from placing their bets.

In my August 18 article, I did provide a glimmer of hope for those long RAD stock suggesting that speculative investors might have a play at $2, but everyone else should steer clear.

My Rationale on Rite Aid Stock

I based my speculative bet on the simple fact Rite Aid probably wasn’t going to go broke in the next 24 months. So, logic dictates, if it’s not going broke in the next two years, Rite Aid stock has nearly as much chance to go to $4 as it does to drop to zero.

Granted, that’s not a criterion a buy-and-hold investor should use to assess a stock, but it works if you’re speculating for a quick profit.

InvestorPlace’s Josh Enomoto did a good job August 22 explaining why Rite-Aid stock has potential upside despite its overall ugliness.

“RAD still has to utilize the money they’ll receive from the revised deal wisely. But if they do, management can clean up the balance sheet and potentially generate positive cash flow,” Enomoto wrote. “If they play their cards right, the pharmacy could either turn around their business or become an attractive buyout target. Did I hear someone say Amazon.com, Inc. (NASDAQ:AMZN)?”

Speculators don’t make money looking pretty; they make money being right. If, and that’s a BIG if, you can afford to lose your investment in Rite Aid stock, I don’t see why this is any worse a bet than other similarly-priced stocks.

Retail Bargains a Plenty

While Rite Aid stock is a good speculative bet, it’s time that I address those investing for their 401(k)s and IRAs. You need to be much more careful about any investment you make whether it’s RAD, Amazon or some other company.

While I did state in my last article about Rite Aid that I didn’t think it would go bankrupt anytime soon, I also said that doing substantial business in only two states—California and Pennsylvania—made it entirely too small to survive as an independent over the long haul.

So stay away.

However, as InvestorPlace contributor Lucas Hahn believes, and I tend to agree, there are bargains to be had in the retail industry. Hahn’s two most recent picks instead of RAD are Zumiez Inc. (NASDAQ:ZUMZ) and Express, Inc. (NYSE:EXPR), who’ve been hit by changing consumer trends.

Zumiez, as any former shareholder of Quiksilver knows, is fighting the fading popularity of board sports, while Express’s position in the uninteresting middle leaves it vulnerable to future revenue deterioration.

Of those two, I’d pick Zumiez.

Bottom Line on Rite Aid Stock

If you’re serious about value and retail, I would buy the SPDR S&P Retail (ETF) (NYSEARCA:XRT). It’s down 8.4% year to date through September 8 and 0.12% annually over the past three years, considerably less than the S&P 500, which is up 9.4% over the same three-year period.

The XRT is an equal-weight ETF with 97 retail stocks including RAD at 0.97% and charging just 0.35%. While there are some stinkers amongst the holdings, Amazon’s included at 1.15%, a real selling feature in my opinion.

Since the beginning of 2013, the XRT has traded below $42 for a decent amount of time just four times, the current losing streak the longest of those downturns.

If you’ve got $10,000 to invest, take $2,500 and buy now, and then buy three more times ($2,500 each) every time it crosses above $42 and then heads back down below that critical level.

Long-term, I’m betting you’ll do very well using this approach.

As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.