The North Korean Threat to Utilities

In times of market uncertainty, some investors will flock to “safeguarded” currencies such as the Swiss franc or Japanese yen. Others may choose diversifiers like gold, farmland or other hard assets. And then there are those who flock to alternative investments like bitcoin or fine wine. Yet one investment that has historically been considered a safe bet, low-risk option for investors when frothy markets appear ripe for a correction, or when market bubbles look to burst, is the utility sector. But the recent nuclear threats from North Korea could change that belief.

If North Korea launched a HEMP (high-altitude electromagnetic pulse) attack on the U.S., it could knock out the electricity grid. The industry would suffer severely, eliminating another flight-to-safety investment.