The most popular advice in the world, that you hear from people doing all the time on TV, is to buy high-quality dividend stocks.
But at least today, that’s the worst place to be.
Here are the 10 sectors of the S&P ranked by performance so far today:
- Basic materials: +2.69%
- Oil & Gas +2.62%
- Financials +2.30%
- Industrials +2.16%
- Technology +2.15%
- Consumer Services +1.77%
- Health Care +1.58%
- Consumer Goods +1.42%
- Telecom +1.13%
- Utilities +0.96
So everything is up, and up big.
But the two worst sectors, utilities and telecom are sectors associated with dividends. People are dumping fixed payments, just as they’re dumping Treasuries.
We asked Dave Lutz of Stifel Nicolaus his take:
People are moving out of Yield quickly, as economic prospects increase, and the chances of QE from the Fed diminish (QE = Money Printing = $$ worth less = Bonds worth more). We are seeing Dividend Stocks (Like REITS, Utilities) lagging the recent rally. They are selling Treasuries in inventory back to the Fed. While it’s not a STAGGERING amount, it certainly indicates a concern holding Yield instruments in favour of Risk (Stocks)
For a little more perspective on this, here’s the Utilities ETF (XLU) vs. the S&P ETF. Utillities have been getting smoked ever since the rally started in late July, but relatively Utilities are REALLY getting smoked today.
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