Sin stocks are chameleons. They represent different things to different people. For some, an investment in McDonald’s in light of the way the company at a global level propagates beef slaughter could easily count as a dabble with a sin stock. For others, acquisition of stocks from companies that produce aerated drinks would be tantamount to tinkering in sin stocks because of their links to cardiovascular diseases. So, sin stocks represent a variety of different things to investors in general. Personal preferences play a big role in defining what a sin stock actually is. Moral and ethical standards are culturally and ethnically diverse across demographics, hence, the idea of a sin stock gets defined differently across different strata of human society.
Commonly Identified Sin Stocks
Alcohol, tobacco, weapons manufacturing, gambling and sex. These are things that are universally considered to bring about harm to human beings. The traditional identity of a sin stock would rest with companies and firms that deal in these four basic facets that are universally considered to be social taboos. An early grave through liver damage and lung disease awaits the individuals who abuse alcohol and tobacco. Weapons manufacturing leads to the loss of innocent lives during wartime. Gambling addiction can lead to financial ruin. Sin stocks represent enterprises that directly interact with the public for the purpose of selling the finished products that are physically or mentally harmful.
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The Dividends in Sin Stocks
Sin stocks pay excellent dividends for your investments. Publically traded stocks for tobacco have proved to be consistently lucrative for decades. And this is despite the tremendous social outcry that was organised against big tobacco at the starting of this century due to its disease-causing properties. The same goes for alcohol, consistent returns are guaranteed with at least a segment of the population willing to indulge in alcohol during good times as well as the bad ones. Gambling, on the other hand, is more complicated. Economic downturns adversely affect the gambling industry, with people preferring to conserve their finances during difficult patches. Investments in defense are always profitable with a world that is always telling itself that it is on the precipice of a total global conflict. The internet has completely restructured our idea of sex in unforeseeable ways. Packaged porn is objectively one of the most lucrative investments anyone can involve themselves in today’s world.
Diversifying Your Portfolio
As a connoisseur of financial instruments, an objective analysis of sinful stocks would lead you to the conclusion that, these stocks can occasionally prove to be immune to market downturns. This property of a sin stock could be utilised for the purpose of diversifying your portfolio much effectively and to protect your investments from fluctuations and cyclical devaluations occurring in the economy. There is a reliability inherent in sin stocks because humanity seems to always be willing to furnish money to indulge in their vices.
From a cold, dispassionate and objective financial perspective, there are zero reasons to not invest in sin stocks. They are lucrative investment instruments that mostly pay off. The argument can even be made that, freedom of choice being this country’s most fundamental right, you are not responsible for the choices other people choose to make. On the other hand, cancer, heart attacks, bankruptcy, STDs and death are indirect results of your investment choices. Dubious moral areas are aplenty when it comes to sin stocks.
If the ethical question of encouraging an enterprise that distributes lung cancer to this world does bother your conscience, you could explore a risk-free investment option like KredX that has absolutely no grey areas in morality. In fact, investing in KredX not only guarantees profits at minimal risk, but you can at the same time help small-scale enterprises with working capital through invoice discounting.