Trustnet Magazine Issue 23 November 2016 | Page 24

/ VICES /

“ Cigarettes are being taxed to the hilt in the West , but tobacco companies have established markets in the developing world ”

“ You shouldn ’ t limit yourself to these sectors , you ’ ve got to invest in others as well ,” Willis added .
“ For example , more smoking in emerging markets will lead to greater demand for healthcare while the growth in the middle classes will require greater infrastructure spending and you wouldn ’ t want to deny yourself the opportunities generated from these trends .”
Willis also points out one of the main reasons why tobacco stocks were able to generate such spectacular returns over the period in question was because they rose from such a low base . Numerous court cases in the late 1990s ended with many of these companies forced to pay out billions of dollars in compensation , which hammered share prices .
He adds that rather than hoping to see the same returns from tobacco , investors may wish to look at other battered sectors that are hoping to rebound .
“ You want to have some money in the banks if you are investing over 20 or so years because at some point , they will have to recover and when they do they are really going to take off ,” he finished .
While hoping to see the banks do well in the post-financial crisis world comes with its own unique stigma , for someone who has made a career out of antagonising others , Liam Gallagher may have found the perfect place for his money .•
relevant to them ,” he added . “ It starts conversations about investing and when people see numbers like those , it makes them sit up and say ‘ wow ’. It reminds me of spin-offs – I ’ m from Hull so when Kingston Communications was spun-off , we all bought shares in it – not because we thought it was a particularly good investment , but because we had that emotional attachment .”
However , both advisers say that anyone planning to invest in these areas should only do so as part of a more diversified strategy .
Source : FE Analytics
PERFORMANCE OF INDICES SINCE 1994
4,000 % FTSE 350 Tobacco ( 3372.28 %) 3,500 %
FTSE 350 Beverages ( 1045.52 %)
3,000 % 2,500 % 2,000 % 1,500 % 1,000 % 500 %
0 %
-500%
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