Dip-buyers wary of volatility should consider more stable utility stocks
Utility stocks could become more popular soon. Amid the
trading volatility of recent days, many of the stock market’s usual best
performers made a hard turn downward. Such moves cause many investors to
rethink their investing strategies. Instead of going for the stocks they
believe will go up the furthest, they turn to more stable equities.
Utility stocks have become a common choice in such an
instance. While they may see less stock price growth, they also tend to produce
both profits and steady amounts of cash flow. Moreover, whether the economy
booms or busts, people tend to keep paying their utility bills. This reinforces
the stability of utility stocks.
Investors should also note that the Utilities Select Sector
SPDR ETF (NYSEARCA:XLU), which tracks the utility sector, has risen by almost
3% so far in October. Not only have these stocks to buy not seen the effects of
the October swoon, but they have also grown in value as other stocks retreated.
Additionally, with their steady stream of cash flow, these companies will
likely provide a stable source of dividend income.
Investors should find especially promising returns in the
following companies:
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