Monday, December 29, 2014

A Strong Year for Utilities

What sector of the market performed the best in 2014? It was the usually sleepy utilities, which are generally considered a safe, defensive part of an investor's portfolio. With a couple of trading days left in the year, the utilities sector of the S&P 500 is up 28 percent in 2014.

Close behind the utilities are health care, up 25 percent, and technology, up 18 percent. All the S&P's sectors have increased in value on the year except for energy, which has been dragged down by 9.5 percent, thanks to the worldwide collapse in oil prices, which are down more than 40 percent on the year.

Those quiet utilities are now, in fact, in danger of becoming overbought. The price-to-earnings ratio for that sector is up to 18.8, which is slightly higher than the S&P 500 as a whole at 18.5

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