Shocker: These “Safe” 7% Dividends Will Lead the Market (Down)

It’s easy to see why investors love utilities: Low volatility High yields But there’s a problem: recent scares like the inverted yield curve mean some utilities, and utility funds, have gotten ahead of themselves and are more prone to a pullback than most folks think. (The three 7%+-yielding closed-end funds (CEFs) I’ll show you shortly top this “overpriced” list.) The worst part is, many people think utilities are under bought, because the benchmark Utilities Select Sector SPDR ETF (XLU) is up 8.3% year-to-date, half the 16% gain of the SPDR S&P 500 ETF (SPY). But that’s recency bias. Stretch the timeline to 12 months and things look very different: Utilities Get Pricey Interest-Rate Pause Should Boost Utilities. … Read more
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