Re-balance Cycle Reminder All MyPlanIQ’s newsletters are archived here.

For regular SAA and TAA portfolios, the next re-balance will be on Monday, August 5, 2019. You can also find the re-balance calendar for 2019 on ‘Dashboard‘ page once you log in.

As a reminder to expert users: advanced portfolios are still re-balanced based on their original re-balance schedules and they are not the same as those used in Strategic and Tactical Asset Allocation (SAA and TAA) portfolios of a plan.

Please note that we now list the next re-balance date on every portfolio page.

Utilities Sector Review

Not all businesses are created equal. Businesses in some industries and sectors have exhibited more consistent earnings power because of the intrinsic pricing power and entry barrier (moat) in these sectors. Previously, we have analyzed consumer staples and health care sectors, in addition to S&P 500 companies as a business: 

We have shown that companies in consumer staples and health care sectors have more stable business that is translated to their steady stock returns. In this newsletter, we will continue to look at another sector, utilities, which has similar characteristics. 

Utility companies include water, gas, electric alternative energy and other infrastructure firms. Their industries are usually regulated: for example, an electricity company cannot arbitrarily raise its price. As these companies are usually involved with big up front infrastructure that are for our daily life, the entry barrier is very high (imagine how hard it is to start a new gas utility company from scratch). Since these businesses are more or less like regular toll collection, they enjoy more steady income and thus pay higher dividends to their shareholders on average. Furthermore, they can pass on inflation cost (such as commodity cost) to consumers, thus they also offer inflation protection. Utility stocks are perceived to be between average/growth stocks and bonds. 

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