Economists forecast that the interest rates may rise soon which creates nightmare for defensive sectors. The 2008-2009 market crash and the recovery have battered defensive sectors. Panic investors start to sell their holding when their stocks lose money.
Utilities
Fortis Inc (TSE:FTS) down 9.4%, Canadian Utilities Limited (TSE:CU) down 11.8% and Emera Inc.(TSE:EMA) down 13.2 %. Utilities are very high sensitive to interest rate.
REITs
iShares S&P TSX Capped REIT Index Fund (TSE:XRE) down 12% and BMO Equal Weight REITS Index ETF (TSE:ZRE) down 12% as well. Similar to Utilities REITs also very sensitive to interest reate.
If you have invested in those defensive sectors such as utilities, telecommunications, pipelines, REITs and consumer stables for income purpose, there no reason to panic. Actually, there are number of way you can play during this time.
- You can buy more high quality stocks at low price
- Put some money into saving accounts as an emergency fund
- Buy more insurance stocks such as Sun life (TSE: SLF), Manuliffe (TSE: MFC)as they benefit from higher rates
Investors panic on everything. How about you?
Nice blog guys,now think for one moment what the information in this will do for your business or earning money