Despite widespread expectation for rates to rise, we still haven’t actually seen a meaningful jump. And with the economy still just limping along, the Fed should kept rates in the basement for a while.
Which should benefit the best friend of retirement investors — utility stocks.
Utilities are often a go-to asset class for those in retirement, as the sector provides plenty of big income opportunities. After all, consumers, businesses and municipalities still need to power their operations and cool their homes, even in tough economic times. Water still needs to flow and electricity hums through power lines. Ultimately, utilities’ stable cash flows and recession-resistant nature make them ideal candidates for investing during retirement. More importantly, those dividends have historically risen faster than inflation rates.
So utilities still have a place in the portfolios of retirement investors. But how exactly should investors go about adding the sector to a portfolio? Here’s one stock, one exchange-traded fund and one mutual fund to get you started.