grinninbrit71

Utilities Beginning to Generate Interest for Longs

Worth a beginning look perhaps... but be careful. There was definitely massive over-valuation in the utility sector over the last few years. Look at how utilities performed before that, and they can often be analzed as an interest-rate vehicle. What type of dividends do they pay in relation to bond classes? While its true the garden-variety recession might result in this sector being a reasonable place to park, what we have coming could be dramatically different. Both in the level of reduced consumption and in sharply increased long-term bond rates due to the most MASSIVE injections of government currency ever. Take a look at how another sector which is seemingly another good place to look is getting slammed, muni-bonds. The market seems to be starting to incorporate much heightened long term rate concerns. There have been many times when a rise in long-term yields results in utilities yields (dividends) going up in tandem as their prices going down. Yes, keep your eyes on this... nibble perhaps.... but be VERY careful.