For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.
"The market is looking increasingly fragile -- and our top pick for 2008 is a stellar investment that has all the makings of a bear-market killer: The Vice Fund (VICEX)," says Eric Roseman, editor of Commodity Trend Alert.
"This fund will do well as long as people continue to drink, smoke and gamble. The fund might not be the most wholesome investment in your portfolio, but it sure earns a big score for making bundles of dough from many industries currently shunned by investors and portfolio managers.
"And best of all, as the economy contracts, stocks in its highly concentrated and aggressive portfolio usually grow their corporate earnings while the broader market corrects. Bull or bear, it doesn't matter. The Vice Fund can generate profits in any economic environment -- provided people continue to gamble, drink and smoke.
"Launched in 2002, the Vice Fund is advised by Mutual Advisors, Inc, a small outfit with $177 million under management. But its size is actually highly advantageous to investors because of its ability to quickly enter and close trades and buy some companies that might be thinly traded.
"The Vice Fund is unique in mutual fund circles because it holds investments in just four sectors of the marketplace: alcohol, tobacco, casinos and aerospace/defense.
"Better known as 'sin' industries, earnings for these companies have been superb even as the broader economy has stumbled since the advent of the subprime crisis earlier in 2007. In fact, you could argue that as economic difficulties persist, the Vice Fund makes even more money!
"This past year, the Vice Fund has gained a cumulative 24% versus just 5.3% for the S&P 500 Index. Morningstar, the highly rated mutual fund-tracking firm, awards the Vice Fund a maximum five-star rating.
"The Vice Fund maintains a very concentrated portfolio of almost entirely large-cap companies. Portfolio composition currently includes 68% in the United States (tobacco firm Altria is the largest US holding) and 30.4% in foreign markets (liquor distributor Diageo is the largest non-US position).
"In an environment of growing risk aversion and margin compression for many sectors of the economy, sin stocks have historically evaded most bear markets because of growing demand for their products. Earnings for these companies are reliable and, generally, not contingent on an expanding economic cycle.
"It's been a great bull market since 2003 for most investors, but with cracks now firmly in place across housing and financial services, it's time to add some spice to your portfolio, and hopefully profits ahead of the next bear market.
"The Vice Fund is available no-load (no up-front fees) but does charge an early redemption fee of 1% to investors exiting within sixty days of their initial purchase. The Fund requires a $4,000 minimum investment and levies a 1.90% annual expense ratio."
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Reader Comments (Page 1 of 1)
2-08-2008 @ 7:08PM
beverly archer said...
i would like to start investing but i do not have $4000.00 to start. is there a share building account available in mutual and vice funds? if there is, how can i get started and how much would my initial investment and weekly deposits be? please advice. I only heard about vice funds today on the news from Clark Howard. I live in Georgia.