General Question

GrumpyGram's avatar

How Do You Feel About Investing in Tobacco Stocks?

Asked by GrumpyGram (822points) June 2nd, 2010

Do you feel it is immoral or just wrong to own Big Tobacco because of the high dividend? Or do you think it’s ok since your investment will not cause kids to start smoking?

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8 Answers

janbb's avatar

Wouldn’t knowingly do it, but it’s possible I have money in a mutual fund that is invested in it.

ItsAHabit's avatar

If you and many others don’t invest in it, that reduces the demand (and price) of the shares. That in turn increases returns for those who do invest in it. If a share costs $10 and pays $1, it provides a 10% return. If the demand falls and it sells for $5, it yields a 20% return.

susanc's avatar

I don’t care how rich it would have made me if I’d knuckled under.
I won’t do it. We do what we can.

judochop's avatar

You should invest in big tobacco and also invest in major drug companies. At one point one will call for the other.

YARNLADY's avatar

Believe it or not, I have just recently read of a new use for tobacco, which has nothing to do with smoking or the associated dangers. I would invest in a company that was performing research for new products.

susanc's avatar

@YARNLADY – what is it?

arpinum's avatar

Tobacco companies and other “sin” stocks tend to outperform the market with higher than average dividend yields. IIRC, Bernanke held large amounts of Altria before going to the fed.

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