Penn Wealth Publishing

2021.03.21 Penn Wealth Report Vol 9 Issue 02

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Penn Wealth Publishing Subscription Information Penn Wealth Publishing 9393 West 110th Street 51 Corporate Woods Suite 500 Overland Park, KS 66210 4 penn wealth Report voluMe 9 issue 02 21 Mar 2021 Penn Wealth Report Copyright 2021. All Rights Reserved. From the Editor/ Take a look at the three colored lines on the graph below, each representing one specific investment over the past five years. Which would you have liked to purchase five years back? Silly question in that the returns are evident, so let's pose it another way: which would you like to own over the next five- year period? To better help you decide on an answer, the blue line rep- resents an investment in the Utilities Select Sector SPDR®. More than doubling that return we have the orange line, representing the S&P 500 Trust. Nearly doubling that return we have QQQ, the Nasdaq proxy. We tend to take past events and extrapolate them into the future. Everyone knows the Nasdaq always outperforms the blue chips; just like everyone knows growth always outperforms value. Of course, neither of those statements are factual. Would you want to own the purple line if you knew it was about to fall 78% and wouldn't get back to "zero" for fifteen years? at's exactly what happened to the Nasdaq beginning exactly sixteen years ago this month. As for stodgy old utilities, they have been in nearly every investor's doghouse for years. It was unintentionally clever that in this issue focusing on the unloved sector we also included a story on the GameStop frenzy. People get caught up in frenzies; they also tend to get slaughtered in them. As for the growth over value narrative, it is an easy one to buy. After all, technology is changing everything about the way we live and work, and technology stocks are overwhelmingly growth stocks. By the way, we could have written that statement (and may have) back in January of 2000. We have been here before, and we see a major cyclical shift in favor of value stocks. And no sector screams value like utilities. If for no other reason, investors should consider buying good names in this sector to balance out their portfolios, which are probably on tech overload. Read on...we'll offer up some names. —MSH Michael S. Hazell editor-in-chief The Wonderful Boringness of Utilities We hold the advantage of having seen this movie before—firsthand. Consider this fair warning.

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