Dividend Stocks Have Been Crushed

Check out this chart. It shows the Utility Sector ETF ($XLU) divided by the S&P 500.

Over the last few weeks, the utes have badly lagged the rest of the stock market (though they’re ahead sharply today). It’s not just utes but it’s most stocks that pay rich dividends. Telecoms have struggled as well. The reason is that the market feels — wrongly in my opinion — that the Fed will soon raise interest rates. If that happens, then high-yielding stocks won’t be as important.

Posted by Eddy Elfenbein on June 3rd, 2013 at 12:05 pm

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