Q: I bought Microsoft shares and they're not doing anything. Does that mean I should sell?
A: Stagnation is not a flattering attribute of plants, employees or stocks. Few investors buy a stock hoping it will do nothing.
But there are times when a stock that's not doing much is actually a positive. Sometimes, amid a market correction, a stock just holding its own is a reason for confidence.
Some investors look for stocks that will hold steady when the rest of the market is running into trouble. Investors commonly rush into health care and utility stocks, for instance, when the broad market is declining. While health care and utilities are some of the industry groups with the lowest expected returns, they tend to also be some of the most stable during times of market volatility.
Investors don't typically look to high-tech stocks such as Microsoft ( MSFT) for a place to hide. This year the stock is up but it has been clinging to a $27- to $32-a-share range.
But Microsoft does offer something to help investors be patient: The stock sports a 2.6% annual dividend yield, which is very competitive with the 2.0% dividend yield paid on average by the Standard & Poor's 500 companies.
Microsoft is also a mature technology company, with a number of stable products that can be counted on. Meanwhile, there's a chance at growth as the company pushes more aggressively into mobile computing with its upcoming Windows 8 operating system.
Investors, though, need to remember that while Microsoft is a relatively stable company compared with many peers in technology, it's still not the same as a utility.
Microsoft investors have been forced to be patient for years. So far the dividend has been the lure to keep investors interested. And his year's 17% gain in the stock has been an added perk. But bulls in the stock say that the reception of Windows 8 will be the first glimpse into what the company's immediate future will look like.
Matt Krantz is a financial markets reporter at USA TODAY and author of Investing Online for Dummies and Fundamental Analysis for Dummies. He answers a different reader question every weekday in his Ask Matt column at money.usatoday.com. To submit a question, e-mail Matt at firstname.lastname@example.org. Follow Matt on Twitter at: twitter.com/mattkrantz