Market Motion Sickness?? Better take a dose of Utilities

Another summer week in the books and the typical earnings volatility is present, much as was in April.  However, this time it's been "one-step forward, three-steps back".  Banks and GE led the market lower for the week.  Financials were down nearly 3% for the week.  We've had nothing good to say about investing in the largest banks.  A 9% drop in Bank of America on Friday over-shadowed the great results from Intel on Tuesday. I can't imagine what would make us get excited about any of the top 15-20 US banks.  (Of course, Europe's banks are no better.) There are still plenty of quality companies to buy but decide on the entry price BEFORE the market drops.  That's what we're doing on a number of companies we already own and others we want to add to the portfolio. 

With the Dow falling 1000 points since late April, what's held the line?  Utilities.  The Dow Jones Utility Index is flat  before dividends.  Not exciting but a portfolio needing stability in these see-saw days should own some utilities.  With no short-term rate hikes in sight, these companies shouldn't have higher interest costs for their borrowing needs.   In addition, the dividends are much better than the 0.18% the 6-month Treasury bill is paying.  That's about the same yield as the 10 largest money market funds.  YUK!!