Boring is the new exciting.
Like everyone else on earth, we’ve noted the pounding that high-flying tech stocks have taken in recent days. While sexy stocks such as Tesla $TSLA, Netflix $NFLX, Twitter $TWTR and Facebook $META have captured people’s imagination over the last year, the truth is that, this year, investors have been far more interested in solid, dividend-paying blue chips. That’s the dynamic that has made utilities—yes, utilities!—the best-performing part of the US market so far this year.
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Barron’s made a good case for buying utilities not too long ago. And honestly, the case is pretty much always the same. Stocks in the sector pay a great dividend. (At last glance it was about 3.8%, versus a bit less than 2% for the S&P 500.)
But it’s received wisdom that shares of gas and electric companies also tend to be a good place to take shelter when the markets get a bit rocky. So one way to interpret the rise of the utilities sector this year is that investors are bracing for an ugly selloff in the broader market.
