Top 4 Stocks For The Fashion Minded

If I told you buying a stock was just like buying a pair of shoes you’d probably think I’m crazy. But a look below the surface reveals that the two actually have quite a few similarities.

Just like stocks, shoes are all about assessing risk.

[tweetmeme]There’s a big difference between going with flats and pulling out your 5-inch, Louboutin curved heels. The 5-inchers are all about upside. You could crash and burn, but if the wind blows just right you could also find yourself being swept off your feet by Prince Charming. Stocks are the same way. High risk, high reward.

Also like stocks, shoes are all about style.

There’s a reason why we choose pink over purple or shaped instead of flat; because we use style as a way to express our personalities and tell the world who we are. Stocks are the same way. People like to own companies they feel an emotional connection with and that say something about their world view.

And also like stocks, shoes are disposable.

Styles come and styles go, fashion is a very dynamic environment. But that’s not your problem, because buying shoes doesn’t require a contract. Stocks are the same way. When the obsession with your favorite investment ends, you kick it to the curb and start looking for a new BSF (Best Stock Forever).

 And finally, when it comes to footwear, comfort is king.

The whole reason human beings started wearing shoes in the first place was to make life more comfortable. The same is true for stocks. Buying stocks and investing in the market is a way to smooth the bumps and create long-term financial stability.

So as you can see, if you consider yourself a whiz at finding the latest and greatest trends in fashion, you might be really good at picking stocks too. So let’s go ahead and apply those finely-tuned consumer instincts to the market and take a look at our favorite stocks out of the retail and fashion industry.

Top 4 Retail and Fashion Stocks

Coach (COH)

A familiar name to most, Coach specializes in high-end bags and accessories. This segment of the market has held up surprisingly well in the weak consumer environment of the last two years as high-end consumers have retained more discretionary spending power. But it’s not all about the upper end, Coach smartly diversified its offerings to capture a larger audience and expand into new markets. That strategy has paid off nicely, with shares up more than 50% in just the last 6 months. That means more than a few new purses for those following the trend.

Limited Brands (LTD)

This is a diversified retail play, with Limited Brands owning a portfolio of stores that includes Victoria’s Secret, Bath & Body Works and the White Barn Candle Company. Although a lot of people like to talk trash about stocks these days, this one has seen huge gains over the last two years, jumping from $6.25 in March of 2009 to its recent high above $35. For anyone without a calculator that’s a lot of bra’s and underwear.

Steve Madden (SHOO)

If nothing else, this company has the right ticker symbol. SHOO has been a hot name in shoes for the last few years, finding a very solid niche between the high and mid segments of the market. That’s a formula that has paid off for the company, with shares recently hitting a new all-time high on another great quarter. This stock has also seen huge gains since rebounding out of the financial crisis of 2008 and 2009.

Lululemon Athletica, Inc. (LULU)

Looks like selling $100 yoga pants is pretty good business. This has been one of the hottest momentum stories of the year, with the yoga craze pushing shares of LULU to fresh 52-week high after fresh 52-week high. Although a number of new competitors are moving into this space to capture the growing market, LULU still sees its best years ahead. $1000 invested 2 years ago would be worth about $18,000 today. Those are huge gains.

Shoes or stocks, there’s lots to learn and lots to spend your hard earned money on. What will you invest in next?

Michael Vodicka is the founder and President of the Vodicka Group, Inc., a boutique investment consulting firm that specializes in working with individual investors. Sign up for his weekly update at vodickagroup.com  and get more stocks picks and pointers on how to manage your portfolio.