Sunday, November 05, 2006

Recession Proof Investing

I've wondered for years about about how well a mutual fund could do if it concentrated on alcohol, tobacco, and gambling. The answer is quite well. In addition the "vice" fund invests in the defense industry; thus, hitting the trifecta of alcohol, tobacco, and firearms: The Seattle Times: Business & Technology: Casino, tobacco, alcohol stocks beat market: "...these sectors should perform even better — relative to the overall market — if the economy slows, as most financial experts predict. That's because people will smoke, drink and probably gamble during a recession."


Steve said...

Thanks for the link. At last a mutual fund that mirrors my values: guns, booze, and gambling.!

I had to chuckle at the one quote: "Hugh Johnson, chairman of Johnson Illington Advisors in Albany, N.Y., said although it's true sin sectors have outperformed the broader market in recent years, there's no assurance that will continue."

This is the standard sour grapes comment from an adviser who's own mutual fund hasn't done as well. Yes, one day market cycles do catch up with top performers, but the final question is what the long term results are. I'm sure that when it comes to sin human nature is a good bet.

Mitch Kief said...

I'm tempted to invest, but I worry that the fund manager may be a chain smoking heavy drinker who gambles compulsively, who then ends his life with a hand gun.