In a recent Penny Stock Detectives article, editor Sasha Cekerevac notes that for quite a while, there has been a steady underperformance in gold stocks versus gold bullion.
New York, NY (
prHWY.com) June 21, 2012 - In a recent Penny Stock Detectives article, editor Danny Esposito points out that with stocks around the world correcting, investors are searching for places to safely park their money. Esposito believes the other sector of the market that generally moves in the opposite direction of the general stock market is the utility sector. "The utility sector is comprised of electric, gas and water companies. When the economy is growing, investors sell utility and buy technology and commodity stocks, which grow much faster and provide a better return," Esposito observes. "However, when the world is faced with the prospects of an economic slowdown like it is right now, investors tend to sell technology and commodity stocks, and move into the safety of utility stocks." This makes intuitive sense because no matter how bad a recession can get, people need electricity, gas and water providers, notes Esposito. "The best part about utility stocks is that most of them offer dividend payments. The stream of income is steady, because it originates from municipal taxes, since it is part of the basic services that every homeowner and renter pays for in their respective municipality," says Esposito. Esposito notes that since bank deposit rates are almost zero, investors are looking for alternative places to earn interest income. Not only are utility stocks safer because they offer such basic necessities everyone needs regardless of the economic environment, but also many provide dividend payments that are greater than what banks are paying today. In Esposito's opinion, this makes utility stocks a great investment for investors looking to protect their money, but also to hold something other than cash, which will not pay anything, or a bank deposit, which doesn't provide any interest income either. In this market environment, Esposito believes utility stocks are an excellent sector of the market investors should look at to protect their money while earning a dividend payment, because they provide essentials we all need. The editor also points out that low interest rates reduce the costs for utility stocks, which improve earnings, providing yet another reason why investors need to explore this area of the market. "Investors won't lose sleep over utility stocks," assures Esposito. To see the full article and to learn more about Penny Stock Detectives, visit
www.pennystockdetectives.com.
The editors of Penny Stock Detectives believe low-priced stocks, when researched properly, present investors with great opportunities to accumulate wealth and to increase the value of their investment portfolios. You can learn more about Penny Stock Detectives at
www.pennystockdetectives.com.
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