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No. of Recommendations: 1

???? Good Question::

Past performance is not a prediction of future returns!

But lets look at the period from January 2005 - January 2008 when the interest rates went up (especially short term):

We can use the Dow Jones Utility index for proxy of Utilities.

______ STOCK
Value Jan 08
Last Dividend in 07
Value Jan 05
Last Dividend in 04


19.09 39.96 13.55 38.01 15.74 36.87 47.23 67.5 61.97 57.91 15.87 36.63 31.6 29.98
0 0.41 0.17 0.20 0.22 0.58 0.305 0.44 0.5 0.41 0.23 0.36 0.403 0.1
14.05 27.22 8.57 27.70 11.7 32.00 27.41 36.05 31.25 31.36 16.91 28.41 25.42 15.15
0 0.35 0.1 0.33 0.275 0.57 0.25 0.4 0.375 0.34 0.23 0.3 0.358 0.05

So for a total of one share of each stock:

January 08 "Principle" of $511.91 w/ dividend of $4.326

Definitely up from

January 05 "Principle" of $333.20 w/ dividend of $3.926

Over this time period:
Principle growth of approximately 42%, ~12.2% annualized
Dividend growth of approximately 9.7%, ~3.1% annualized

Dividends = 3.3% yield on current price or 5.19% yield on investment price which ever way you prefer to look at it.

So based on this - I would say, NO! Just because interest rates go up - does not mean your principle will go down!


Who left PEG out of the equations cause being the under achiever - didnt want to dig up historical prices for that bugger. But will note - was not a very good time for them and may bring the numbers down but not directly related to interest rates!!
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