finance.yahoo.com had an article praising utilities as the new bonds,
but I got scared away from their awful performance in 2003 downturn -
worse than sp500.
btw finance.yahoo.com has had an amazing run on retirement articles,
often addressing questions posted here as if they are watching.
Ugh, I think I scrambled my meaning. I was trying to look at the price
volatility of utilities vs bonds and sp500, expecting xlu to be
inbetween. It has been that way the last year or so, but not so much
shows xlu MORE volatile than sp500 2002 thru 2008, and before that it
was even inversely correlated (downward). I forget why it death
spiraled in 2003, but that was my main concern - why did it behave
like the worst speculative internet stock vs the sp500, and could it
be so in the future? It certainly didn't act like bonds around
2001-2005, although it has recently and in 2000.
Well, now may be a cheap time to buy them when their 4% dividends may
be underappreciated, due to uncertainty whether the dividends will be
taxed more in the next year or three. So that's a bunch of
brainstorming about the sector but obviously I have no insight about
your question where to go within that sector.
I'll just brainstorm a bit about dividend plays in general, using some
admittedly sloppy research that would need confirming before taking
entirely seriously. Here is a 2 year graph comparing XLU utilities
fund against other dividend plays, and XLU shows both the worst price
action and the worst dividends:
I didn't include DVY div stocks which just looks like a worse version
of XLU. If I type XLU or whatever into the quote field, I see 4%
yield. All the others give about 5% except JNK junk bonds at nearly
11% (these readings probably laggy).
Click around different time periods - I like the great returns of
multiasset cvy and jnk but they are actually still rebounding from a
deep fall in the crash of 08-9. emb emerging bonds seem the most
reliable, although they are going thru a brief funk like they do every
few years. I guess that makes them a cheap buy, as well as eld which
isn't dollar denominated so you benefit by falling dollar.