Defense stocks move in roughly ten-year cycles, usually gaining for about eight years, underperforming for two, before gaining again.
Bill Schmick, an investment advisor at Otana Partners, says the growth phase is poised to start again, making 2022 prime time for exposure to this industry. Yet that does not necessarily mean investing in it is the right thing to do.
Defense stocks are not without controversy. Opportunistic profiteering from war, especially by politicians, is not a good look.
Investing in weapons will never be morally acceptable to some people. For those who feel strongly about disarmament, online tools scour portfolios for links to defense contractors and suggest alternative assets.
Yet with horrifying images from Ukraine streaming through social media feeds every day, mainstream public opinion on the matter could be shifting.
Gallup polls from February (before the invasion) showed roughly two-thirds of Americans agreed that it is important for the U.S. to stay No. 1 in the world in terms of military power.
However, almost the same portion of Americans (about 66%) said defense spending is either about right or too little.
For those looking to bank on America’s military preeminence and the hard power that undergirds the liberal global order, 2022 could be the year to get in on the action.