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So far in 2013, we've seen the market basically tread water. After the huge fiscal cliff deal inspired buying in the first trading day of the year, the markets have drifted lower, and we are right about where we were when we started the year.
Now, if we step back a bit and look at what's happened to stocks over the past six months, we see that stocks have enjoyed a very nice bullish run.
The broad measure of the biggest stocks in the domestic market, the S&P 500 index, has delivered a total return of 9.5% over the past half year (from July 11, 2012 through Jan. 11, 2013). That's very strong performance for a major average, and if you've been invested in the biggest winners in the index -- e.g., First Solar (NASDAQ: FSLR) +125.5%, Sprint Nextel (NYSE: S) +86.2%, PulteGroup (NYSE: PHM) +79.9% -- then you're likely a very happy trader.
Unfortunately, most of us have at least a few S&P 500 dogs in our portfolio, and by that I mean stocks that have woefully underperformed the overall index. These are stocks that you can't afford to sit around and wait for to make a comeback.
The table below shows the biggest losers in the S&P 500 over the past six months.
The list here reads like a who's who of large-cap tech, with Hewlett-Packard (NYSE: HPQ) and Advanced Micro Devices (NYSE: AMD) both registering big losses over the past six months. AMD's drop of 47.49% represents the single biggest loss on the S&P 500 since July 11, 2012.
One tech stock that just barely missed being in the bottom 15 is Apple (NASDAQ: AAPL). Once the must-own stock for traders and investors, AAPL shares have had a dismal latter half of 2012, down 13.15% versus the S&P 500's gain of nearly 10%.
Other notable decliners on the list are discount retailers Ross Stores (NASDAQ: ROST), Family Dollar Stores (NYSE: FDO), Dollar General (NYSE: DG), Dollar Tree (NASDAQ: DLTR) and Big Lots (NYSE: BIG). The discount retail sector has not been where you want to shop with your trading capital, and until things turn around, it's best to avoid the sector.
If you own the stocks on this list, they represent a lot of underbrush in your portfolio. In order for you to clear the fields and move forward in 2013, you should probably sell now. Doing so will allow you to raise cash, and then reallocate that cash to companies with a better chance of achieving your trading profit goals.
Twenty years ago, one of my competitors complimented all the effort I was putting into my trades… and then told me I was doing it all wrong.
While the sector is hanging on by a thread, shares of this company have already started breaking down.
This historic brand is highly susceptible to our changing food landscape. Even just a small move lower could net us a 25% gain.