5 'Sinful' Stocks to Buy for 2012 Gains
As investor anxiety ramps up in April, market participants are getting desperate about their trades, turning to treasuries, cash, and -- dare I say it -- sin stocks.
But don't let the name fool you; sin stock companies aren't exactly in the business of burning down old folks' homes. Instead, alcohol, tobacco, gambling and weapons firms are all classical examples of sin stocks.
So what makes sin stocks so attractive when anxiety ratchets higher?
For starters, sin stocks tend to be businesses that provide a stress outlet for consumers. As a result, recession resistant revenues and sticky customer bases are the norm. The devil's in the details with sin stocks; because these firms generally sport wide economic moats and deeper margins than traditional consumer plays, sin stocks benefit from an extra qualitative boost that you can't find in any other group right now. In 2012 the data already prove that to be the case.
In the past three months, the S&P 500 has gained around 5% -- but over that same period, the aptly-named Vice Fund (VICEX), a sin stock-focused mutual fund, has actually gained nearly twice as much over that same period. That's an auspicious sign for investors looking for relative strength right now.