Saturday, February 16, 2013

Financial planners say that retirees should be in stocks again, but not including utilities

I got a call from a “financial planner” at Wells Fargo last week, saying that now is the time for retired people to think more about stocks again (at least 25% of a portfolio).  That sounds a little optimistic, because stocks have already risen a lot, and could go down again if there is some other hit.
He also said that this is not the time to own a lot of utility stocks, which are almost like “bonds”.  They pay excellent dividends. 
Utilities could face major expenses as they come under pressure not only to buttress their nuclear plant safety (a plant in Florida will never reopen), but also buttress the power grid, particularly against potential solar storms in the near future.  This will surely be very expensive.
Furthermore, restoration work after major Earth weather events (like Sandy and the recent Noreaster) is costing a lot more. 

My parents did have a lot of utilities, and a lot of oil, all of their lives.  Because consumers always need these, they did well over several decades.  They helped pay for my mother's care. 

I bought some Exxon (then Mobil) in 1977 for about $600.  Now its worth 20-30 times that.  It's still in my IRA. Am I one of the "exploitation class" destroying the planet? 

Furthermore, a natural gas well in Ohio (related to Marcellus Shale) largely paid for my aunt's care in her last years.  Energy equities are what saved me and our family.  

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