Why Technology Should Be In Most Portfolios Although it is well known that the odds are against investors trying to do better than the leading market indexes, there remains the temptation to be among the few who have actually succeeded in outperforming. Since stock prices over time reflect changes in underlying earnings, it should be rather obvious that the task of coming out ahead will depend on picking sectors that traditionally have grown more rapidly than industry generally. That eliminates areas such as basic materials, construction, industrial goods, and insurance, which all have cyclical tendencies. It also eliminates consumer staples and utilities, which grow steadily, but slowly. Not only that, but the performance of utility shares directly reflects the comparison of their dividend yields with that of prevailing interest rates since these stocks are usually viewed as income providers. When utilities raise their dividends regularly, their shares will hold their ow
Investment and economic observations by N. Russell Wayne, CFP, MBA. Mr. Wayne is the president of Sound Asset Management, inc. and former Managing Editor of The Value Line Investment Survey.