Friday Inflation Fun: The Cost Of Our Vices

Proprietary Data Insights

Financial Pros Top ETF Searches This Month

RankNameSearches
#1SPDR S&P 500 ETF1,888,211
#2Invesco QQQ924,476
#3ProShares Ultra VIX Short-Term Futures207,980
#4ProShares UltraPro QQQ206,247
#5Direxion Daily Semiconductor Bull 3x Shares163,336
#235AdvisorShares Vice ETF2,836

The Vice Economy  

After detailing the drop in the cost of cannabis earlier this week in The Juice, we got to thinking about vices. The things we’ll participate in, irrespective of cost and despite the condition of our personal finance or the broad economy. 

Of Course, There’s An ETF For That

Source: Google Finance 

Of course, there’s more than one ETF tracking the vice economy (alcohol, tobacco, gaming, cannabis, hospitality, video games, eSports, etc.). As much as we love the BAD ETF’s name (BAD), we focused on the AdvisorShares Vice ETF (VICE) because it showed up first in our proprietary Trackstar database of the tickers financial pros are searching for. 

While we wouldn’t recommend these ETFs as the cornerstone of your portfolio, it’s fun to take a tour, particularly on a Friday the 13th ending another long week of not-so-great economic news. 

Source: AdvisorShares 

No surprise, gaming, alcohol, and tobacco dominate VICE. 

Scroll with us to see how some areas within these sectors look amid the worst inflation we’ve seen in decades.

Inflation

The Cost Of Our Vices

Key Takeaways:

  • With overall inflation soaring, we look at the cost of some of our biggest vices.  
  • It’s a mixed bag, however between 2019 and 2022, the cost of three main vices comes in under the current inflation rate. 
  • Take comfort that you can seek comfort without completely breaking your pocketbook. 

 

We found a fun website that tracks the cost over time of items included in the Consumer Price Index (CPI). While we didn’t find dramatic decreases like we’ve seen in weed over the last year, we found comfort in some of the data. 

For example –

Source: in2013dollars.com

So the cost of beer, ale, and other malt beverages increased by 2.67% in 2022. It’s up 8.1% compared to pre-pandemic 2019, representing a $1.62 difference in value. Basically, $20 worth of these items in 2019 would run you $21.62 in 2022. 

Imbibing Away From Home

Let’s be optimistic and pull the kernel of good news out of this data. 

Compared to the 1980s, what a great time to be alive if you like to drink in bars and restaurants. While the same $20 worth of booze away from home in 2019 costs $21.75 in 2022, the pace of inflation from year to year has slowed. 

Smoking Is Bad For You

For cigarettes, we went further back in time on the comparison. 

I mean, as a kid growing up in the 1980s, we used to make ashtrays out of clay in art class at school and take them home as gifts for our parents. Those days are long gone. Depending on your perspective, you could say we’ve evolved as a society. 

Since 1997, the cost of cigarettes has increased 444%. That’s a $22.20 change in value. In 2022, cigarettes cost about 5% more than they did the year prior. A big jump, but still lower than April’s overall year-over-year inflation number of 8.3%.  

La Dolce Vita! 

Between 2019 and 2022, prices for sugar and sweets increased by 12.9%, or $2.58. 

In case you’re wondering about that huge spike in 1974 – an inflation rate of 52.2% to be exact – we did some digging. A confluence of factors, including price fixing, fueled the increase, however it appears to have come down to worldwide sugar demand and consumption outstripping production. The trend started in 1971. Within a couple years, sugar prices plummeted and there were calls for the government to bail out U.S. producers by restricting imports and implementing price supports. 

The Bottom Line: While it’s probably not wise to sink all of your money into a vice-focused ETF or spend all of your money on your vices, it’s nice to know you have options. 

Nothing can compare to the 22% decrease in the price of a gram of weed over the last year, however recent increases in the cost of booze, cigarettes, and sugar/sweets ended up not being as dramatic as we expected heading into this exercise. 

Bookmark this as a piece of good news heading into your weekend.

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