Even Utility Stocks Have Risks

Utility stocks were once the domain of widows and orphans. Investment decisions were straightforward: Buy a few good utility stocks, live off their dividends and forget about the underlying companies. After all, utilities managed themselves, and dividends were assured.

Those days are over. Over the last several months, three important trends emerged, which changed how investors view and manage their utility stocks. The first trend has been addressed by my Real Money colleague Roger Arnold. In recent articles, Arnold has been warning about falling yields for U.S. Treasury bills, notes and bonds. Yields on bills fell below 1%, to 0.16%, and notes pay only 0.20% for two-year maturities and 1.44% for 10-year maturities. These rates are unprecedented, and they continue to fall....648 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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