By Jim Schutze
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Like many of you, Buzz has been keeping close watch on our 401(k) investment account in this troubled economy, and we're happy to report that despite recent setbacks, we're still on track for a comfortable retirement. At age 135. Barring any unforeseen changes at the Dallas Observer, or a winning lottery ticket, that means you can safely look forward to another 95 years or so of Buzz.
So when it comes to investment advice, Buzz may not be your best source. Then again, apparently neither are Wall Street analysts. In any case, we're thinking of taking some of the money we used to spend on beer and cigarettes (stopped smoking again, and, boy, we feel just effing great) and investing it in beer and cigarettes. Maybe casinos, too, and a few F-16 fighter aircraft. Or guns.
Thanks to a new Dallas-based mutual fund, the Vice Fund, we can easily sink our meager savings into all four areas. The fund, part of Mutuals.com Inc., was launched a month ago and limits its investments to the alcohol, tobacco, gaming and defense industries. You know, sin.
"We believe these particular sectors are recession-proof," says Dan Ahrens, the fund's co-manager.
The fund's philosophy sounds like little more than a marketing gimmick, but Ahrens says there are strong numbers to support the case for a vice investment. (Hey, it worked for the Mafia.) The fund's Web site, www.vicefund.com, includes charts showing that three of the four investment areas have outperformed the Standard & Poor's 500 index over the past five years. Only tobacco has trailed the index, which you might expect from an industry that has the unpleasant practice of killing off its loyal customers. (Sorry, former fellow smokers. The lack of nicotine has Buzz feeling all self-righteous. Can we smell your clothes?)
The fund's philosophy runs counter to the trend of "socially responsible investing," which encourages investors to let their portfolios reflect their consciences. But Ahrens points out that many SRI funds tend to mirror the S&P 500, minus some very profitable industries such as defense and tobacco. He also notes that no one has accused big tobacco of the sort of book-cooking that has afflicted formerly reputable companies like Enron.
"We don't think it's about making political statements at all," Ahrens says of the Vice Fund. "The numbers don't lie, and we want to be very serious about this thing."
Not too serious, though. Ahrens says he's been asked why the fund isn't investing in sex, too, but "there's not any good companies to own in the sex industry." Why no publicly traded sex businesses? Maybe "they don't want anyone looking at their books," Ahrens says.
If the Vice Fund tanks, maybe Ahrens can find work as a straight man.