Dear Mr. Berko: 

I am 54 and have $40,000 to invest in my individual retirement account. Because I want safety, my broker recommended that I invest half in a 4 percent government bond fund and half in a 2.25 percent fixed annuity, which he says would be unaffected by a steep decline in the market. I have my doubts about the future of those investments for me and would like to hear your recommendations. 

R.P., Cincinnati


Dear R.P.: 

I’d rather grow potatoes in Puerto Rico than own those products. Use that $40,000 to buy AT&T Inc., which yields 5.3 percent and has the likelihood of small dividend increases annually.

There are no stocks (or any investments, for that matter) whose earnings, dividends and market values would be unaffected by a steep decline in the Dow Jones industrial average. But among those issues that would be least affected and would probably continue to prosper, though very modestly, is AT&T – or Ma Bell, as it was once known. Ma Bell’s profound impact on the economy and culture of 20th-century America is legendary. And it’s more than reasonable to believe that AT&T’s impact on the 21st century can be as significant. So I say that brokster ought to have his head examined. And a psychiatrist in your city whom I know might see him this week. AT&T (T-$34.72) will probably increase its dividend every year -- between very modestly and barely modestly -- in the coming dozen years.

A dozen years ago, T’s revenues were $38 billion, and those revenues should grow to $129 billion this year. Since then, net income has improved from $4.8 billion to $13 billion -- even though net profit margins have declined to 9.8 percent, their lowest level in 30 years. Though the dot-com bubble launched T to $59, its crash dropped the share price to $21 a few years later. Still, T increased the dividend in 11 of the past dozen years (77 percent), from $1.02 to $1.80 in 2013. No matter how the crow caws, those are very respectable numbers, and with T shares trading at their lowest price-earnings ratio in a quarter-century, the stock is darn fairly priced. At $34.72, T is one of the most attractive income and growth investments on the planet.

Still, most brokers consider T as boring and bland as consommé. Remember that these guys and Wall Street make money only when customers buy and sell things. Smart investors make money by holding stocks such as T for dozens of years. However, in the next dozen years, there will be epochal changes in communications technology that will exponentially eclipse the technology advancements of the past dozen years. But let’s be super-conservative and assume that T grows revenues, earnings and dividends by just 70 percent of what it did in the past dozen years. If we make that assumption, in 12 years, revenues will increase to more than $300 million, and income will grow to nearly $25 billion. T’s dividend could rise to $2.77 a share. And that dividend would yield 8 percent at today’s purchase price -- better, by orders of magnitude, than any high-commission, funky 4 percent government bond fund or 2.5 percent fixed annuity. And just imagine the impressive results if you reinvested the dividends for a dozen years and then, at age 66, began receiving dividend checks.

AT&T is a solidly boring stock. It lacks the glamour, zing, excitement and drama of Spotify, Tesla, LinkedIn, Groupon, Twitter, Salesforce.com and FireEye. But as a long-term investor who wisely plans for the future, I’d choose T in a Sioux City second over any of the glamorous, rah-rah, go-go, fast-paced drivel above. Frankly, your broker’s recommendations are pathetic. T’s stability, dependability, profitability and predictability should shout “buy me” to every conservative long-term investor. Yes, T’s share price will fall when the market falls, but it won’t fall nearly so hard as the market. And compared with Groupon, Salesforce.com and numerous others whose revenues and earnings will tumble when the economy stumbles, T’s revenues, earnings and dividends are affected little by changes in the economic cycle. Certainly, the past dozen years have proved that.