Disney (DIS) demonstrated the importance of being diversified with your exchange traded funds (ETFs) when it announced its earnings today.
The numbers came in better-than-expected, with a 22% rise in quarterly earnings, reports Gina Keating for Reuters. A weakening economy didn’t stop people from visiting the theme parks, and "Enchanted" sold well on DVD and in foreign theaters.
But what about this summer, as fuel prices show no signs of stopping their ascent? The company’s theme parks division could be hurt by the rising costs, as people opt to stay home this summer instead of rounding up the family for a trip to the Magic Kingdom. And in past recessions, reports Janet Babin for Marketplace, the cruise lines have suffered as well.
But the company might be able to tough it out, because its largest source of revenue actually comes from ads on its TV network. Disney also is involved in things such as movies, cable channels, network channels and resorts.
In other words, Disney hasn’t put all its eggs in one basket, and neither should you. Remaining spread out could protect you if one sector hits a slowdown while another gathers steam. As consumers park themselves on the couch instead of getting behind the wheel, the parks might suffer, but maybe channels such as the Disney Channel and ESPN might benefit.
That could help the media ETF and others that count Disney as a component:
