“Sin stock” is a term used by investors to describe the stock of a company that sells products or services that are considered to be either unethical or immoral. While the definition of unethical or immoral is entirely subjective, sin stocks are found in sectors whose activities are generally frowned upon by Western society.
Popular categories for sin stocks include: alcohol, tobacco, gambling, sex-related industries, and weapons manufacturers.
While many investors shun sin stocks, they are considered recession-proof and generally have a history of strong growth. That’s because it doesn’t matter if the economy is doing well or not, people still find time to drink, gamble, smoke, or search for adult entertainment.
As the investing adage of the day goes, “When the going gets tough, the tough get eating, smoking, and drinking.” And there’s plenty of tough economic data out there to send people into the arms of their favorite vices and sin stocks. In a nutshell, U.S. unemployment has improved year-over-year to 6.7%, but the improved numbers are the result of an increase in low-wage-paying part-time retail jobs. The underemployment rate remains high near 13%, as does the long-term unemployed at 2.3%. And despite the soaring S&P 500, wages haven’t really budged in y ... Read More