Beer, wine and spirits stocks have become a little watered down in recent months. The exact reason isn’t clear, although it’s entirely possible that after many years of double-digit returns, the industry’s stocks have run out of gas and are taking a breather.
Not to worry. Any weakness in booze stocks gives investors a chance to get in the game.
FolioInvesting.com has a ready-to-go folio aptly named Wine, Beer and Spirits, and it points out that booze stocks tend to be less affected by price increases and economic downturns, thus acting as a good hedge in market corrections. If anything, people drink more in difficult economic conditions, making alcohol the crème de la crème of consumer staples stocks.
There are several ways you can invest: You can buy FolioInvesting’s offering by simply opening an account and depositing some cash. Or you could buy iShares’ Global Consumer Staples ETF (NYSE:KXI), a collection of 105 stocks, including most of the 18 from FolioInvesting. A third option is to buy the Vice Fund (MUTF:VICEX), a mutual fund that has been around since 2002 and has outperformed the S&P 500 by 274 basis points annually since then.
Any of these would be a sensible investment. However, I’m going to give you a fourth option by creating a four-stock mini-motif through Motif Investing that invests in micro-, small-, mid- and large-cap booze stocks. Make it a small part of your overall investment portfolio, and you should do just fine in the long term: