Consumer Spending ETF (XLY) in the Current Economy | ETF Trends

The consumer exchange traded fund, iShares Consumer Discretionary (XLY) recently hit a 52-week high.  It will be interesting to see if this strength continues.

Consumer spending accounts for more than two-thirds of economic activity in the US, so when consumers show signs of running out of gas, the entire economy may be in trouble.

In the recent housing boom, rising home prices were creating equity, allowing homeowners to draw on a line of credit or refinance their homes to get cash. Now that home prices have started going down, there is hardly any home equity left. Thus we will continue to see slower consumer spending growth.

Yaser Anwar is a guest author at ETFtrends & the editor of Investment Ideas by Yaser Anwar blog. The author of this article is not a registered financial advisor & does not give investment advice. This article does not comprise any solicitation to buy or sell securities, ETFs or other investment vehicles.