Sin stocks
12 January 2022

Sin stocks

There is a concept in investment “sin stocks”. These shares are characterized by the fact that the companies that issue these shares engage in unethical or immoral activities.

What activities are considered immoral? Often, sin companies include those engaged in the production and sale of tobacco and alcohol products, gambling, the sex industry and the military industry. However, everything is not as obvious as it seems at first glance. Countries often have deep drinking traditions, such as brewing, where alcohol is part of the national identity. The military industry can also acquire a different color.

How does it affect stocks that they are sin? First, it is often noticed that such stocks are more resistant to recessions, and the demand for them is relatively inelastic. Secondly, such stocks can be considered undervalued, as some investors prefer to avoid them. And investors avoid them quite justifiably.

Sin actions are dependent on politics, taxes and people's perception of them. Sin stocks have their own specifics that must be taken into account when purchasing them.