01-24-2015, 04:04 PM
The thing is, IF the FED does increase their interest rates it will be a very small increase. Of course gradually they can keep increasing them as long as they see fit but we won't see any huge changes in the coming years... and during all that time we will still be in a very low rate environment. If an utility stock is very stable and provides 2-4% dividend, usually increasing dividends often, then it's going to take a lot of rate hikes if you are expecting high quality bonds to compete with that.
However I think that the recent volatility together with the ATH prices was the real reason that utilities jumped so much last year. We have been hitting ATHs for a long time now and lets face it, there are a thousand things to be worried about economically speaking. A lot of people still think it's time for a downward correction (myself included) and so people let go of the more risky stocks and buy utilities.
However I think that the recent volatility together with the ATH prices was the real reason that utilities jumped so much last year. We have been hitting ATHs for a long time now and lets face it, there are a thousand things to be worried about economically speaking. A lot of people still think it's time for a downward correction (myself included) and so people let go of the more risky stocks and buy utilities.