🤏 not so safe haven

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🤏 no longer safe

utilities are traditionally a safe haven

• ref: what i wrote about XLU 0.00%↑ (the utilities sector etf) back in august

• utilities (we're talking big tickers like DUK 0.00%↑, D 0.00%↑, and NEE 0.00%↑) are usually the last to slide or free fall in the midst of market downturns

  • these companies collect stable, steady checks from us

now the worst sector

• in the past month, tility stocks have been the "worst-performing sector of the s&p500, down 13%" as opposed to the broad 4% decline in the market

• one could say that all that accelerated inflow into utility stocks throughout this year is beginning to unravel

unsurprisingly, the reason is: rates

• the us 10-year treasury yield is ~4.084% as of writing

• meaning, if one buys this bond and holds till maturity, given that the market almost always considers us treasuries risk-free, it’ll give you a near-4% yield with no risk in consideration

• it’s a no brainer that this gives better yields than a 3.2% yield (dividend rate for utilities) if we’re not considering the potential upside of the price of utility stocks themselves

happy wednesday!

💡 something im thinking about

global wild life population dropped 69% in half a century

that's all, folks 🐒

as always, i’m no financial advisor! (i’m no substitute for professional financial services)