7 Utility Stocks Offering A Spectrum Of Opportunities
By George Fisher:
Many investors think about utility stocks and say, “Why bother? Just hand me those high beta stocks, I need my speculative capital gains fix.” Investing in utility stocks, however, accomplishes several important portfolio investment strategies.
As one of the ten S&P industrial sectors, utility companies represent a vital segment of the economy that is somewhat cyclical in nature, while providing investors stability of earnings and dividend income. For a truly diversified portfolio, some utility exposure is expected.
Utilities are generally considered defensive and conservative investments. For example, the S&P Utility ETF XLU has a 5-yr beta of 0.58. Utility investing is usually characterized as slow and steady, where investor patience creates increasing cash returns on initial investment capital along with capital gains.
Every portfolio, regardless of size, should maintain exposure to income-specific investments. Based on the explicit goals of the portfolio, these may include taxable and tax-free bonds, energy MLPs,Complete Story »
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