How do I Invest in Liquor Stocks?
Liquor stocks refers to shares of companies that produce distilled spirits. Shares of such companies are believed to be immune to recessions, as people tend to keep drinking alcoholic beverages during times of economic difficulty. The shares of spirits distillers can decline, however, if the producers are targeted by government for higher taxes or if all stocks fall because of macro-economic conditions. Buying shares of publicly traded alcoholic beverage makers is not difficult and can be done through any brokerage firm.
Other People Are Reading
Instructions
-
-
1
Identify the publicly traded companies that make distilled spirits. Some of the best known are: Brown-Forman (BF), the owner of Jack Daniels and Finlandia; Constellation Brands (STZ), with Black Velvet and Fleischmann as well as an upscale wine and imported beer portfolio (Corona and St. Paul Girl); and Fortune Brands (FO), the maker of Jim Beam and American distributor of Absolut.
-
2
Analyze the companies' financial and market positions by reading their annual reports, which can be downloaded from their corporate websites. Determine which company is the industry leader from stock- research reports, and check its performance for a long period of time, at least 10 years.
-
-
3
Open an account with a brokerage firm, if you don't already have one. The biggest brokerages include household names like Charles Schwab and Fidelity. These companies have good reputations and competitive commission rates.
-
4
Buy the stock of a company or companies that you've identified as a solid investment with growth potential. Placing the trades yourself with a brokerage company's online trading platform is the most cost-effective way to buy shares.
-
1
Tips & Warnings
Business conditions that have nothing to do with the public's consumption of alcohol can affect the shares of companies that distill liquors.
References
- Photo Credit liquor image by Renee Woodward from Fotolia.com
