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Executive Summary

Top of the Charts

By Roger S. Conrad on Jul. 10, 2016

At the midway point of 2016, the utility and telecom sectors have emerged as the top performers in the S&P 500, delivering total returns of more than 20 percent. Given the make-up of our model Portfolios, we’re not complaining.

Our Conservative Income Portfolio holdings have rallied an average of about 25 percent this year, while the names on our Top 10 DRIPs list have gained an average of almost 30 percent. The Aggressive Income Portfolio has posted an average total return of about 15 percent, while the spotlighted stocks from each issue have gained an average of 14 percent.

Although we remain confident in our holdings’ underlying businesses and growth prospects, stretched valuations suggest that the recent momentum-driven gains won’t last. Historically, the risk of a pullback is elevated whenever the Dow Jones Utilities Average trades at more than 20 times earnings and yields less than 3 percent—a cause for caution.

We continue to emphasize the importance of taking advantage of this rally to reduce risk, rebalance your portfolio and take some profits off the table in big winners. This dry powder will come in handy during the inevitable pullback.

 

Conrad's Utility Investor

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Smart investing. Taking advantage of real opportunities and not fads (and knowing the difference). Finding the companies and stocks that will deliver for the long haul, so investing lets you live instead of investing turning into your life. Roger Conrad has dedicated his career to these principles—and that’s what Conrad's Utility Investor delivers.

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ABOUT ROGER CONRAD

Roger S. Conrad needs no introduction to individual and professional investors, many of whom have profited from his decades of experience uncovering the best dividend-paying stocks for accumulating sustainable wealth. Roger b