Stock Picks

Morningstar Investing Insights: What You Need to Know About Utilities Stocks, Inflation and 3 Top Stocks

Investors have pivoted away from growth to more defensive stocks in recent months. While many top funds and investors are still heavily invested in companies like Apple (AAPL), Alphabet (GOOG), and Microsoft (MSFT), due to their competitive durable advantages, other sectors look attractive now.

  • Special: 32,481% Growth: The SmartPhone Startup Outpacing Apple and Samsung
  • One such sector is the utility space. Investors like it for its consistency and steady cash flows, often paid out in the form of dividends.

    However, customers may want to be cautious on utility investing. Typically, the regulatory issues facing utilities mean that higher electricity costs can’t be passed on to customers.

    Raising electricity costs on customers can be a long, drawn-out process. That can impact how quickly a utility can react to changes in costs. In addition to their high capital costs, utilities may be a safe-haven investment, but they’re far from a growth play.

    • Bill O'Reilly Interviews Wall Street Expert to Help YOU Achieve the American Dream

      "We're going to bring back the American Dream... bigger, better, bolder, richer, safer, and stronger than ever before." - President Donald Trump

      During Trump's first term, 8 million Americans became millionaires despite constant resistance from Democrats and even some Republicans in his cabinet.

      Now, with Republicans controlling both houses and the Fed cutting rates, everything is aligned for even greater growth.

      Bill O'Reilly interviews investment expert Alexander Green who reveals details on 6 stocks with the potential to soar under Trump's pro-business policies.

      Get the Details Right Here

    That said, utilities can still provide investors with a safe-haven investment in volatile markets. Especially as share prices and dividends can increase in time. That’s in contrast to bonds, where rising bond yields come at the expense of rising prices.

    With inflation running high, investors need to find ways to invest and preserve their wealth beyond this destruction of purchasing power. Leaving cash in the bank, where yields remain low, or even still at zero percent, guarantees a loss of purchasing power over time.

  • Special: The Crypto that Could Replace Visa?
  •  

    To hear the full podcast, including content on how to best prepare your financial documents, listen here.