There Is No “Magic Bullet”A new craze is sweeping across the U.S. following the introduction of new plant-based burgers from both Beyond Meat and Impossible Foods. This has led to widespread fanfare for meatless products from both companies with major fast food chains and retailers piling into the space with new menu offerings. This craze has poured over into the investing world following the initial public offering (IPO) of Beyond Meat.
Beyond Meat went public at $25 a share to the initial investors but when it opened for trading on May 2, 2019, the price soared to $46 a share and ended the week at $65.75 a share. This resulted in an astounding 163% return on investment for anyone who was able to purchase at the IPO price of $25. The company, and the stock, has taken the investment world by storm currently trading above $130 a with returns greater than 400%!
Several reasons have contributed to the growth in popularity of both these companies’ products along with other alternative meats, especially for dietary reasons, yet there is no clear connection that eating these plant-based meats is any healthier for you. This Vox article has some good explanations about the growth in popularity of plant-based meat and why there is no clear research supporting that they are in fact a “healthier” alternative to regular meats in terms of diet. Ultimately, although they may be plant-based, they aren’t necessarily made from plants and are still processed foods. From the Vox article, “Plant-based meat is absolutely safe — but it’s not a health food. While there’s a lot of uncertainty in nutrition science, and meatless meat may avoid the cancer risks of red meat, for the most part, it is probably about as good for you as the meat it’s imitating.”
Dieting, nutrition and general healthy eating habits have striking similarities to what works in developing good habits investing and building wealth: the solutions aren’t generally complex or sexy and there is no magic bullet. The newest fad diets whether it be Keto, No-Carbs or intermittent fasting can all help people lose weight, but these habits must become ingrained and turn into a lifestyle. Most research will show that making your own meals from food that you prepare yourself, including meat and vegetables, combined with some exercise or conditioning is the best way to maintain good health.
Similarly, investing doesn’t have any magic bullet. Many people will try to play the lottery or invest all their money into the hottest new stocks or investments, yet both rarely pan out well for the average person. Recently we have seen manias surrounding Bitcoin and Marijuana ETFs that provided some lucky investors with enormous returns but have not made every investor who jumped into the pool rich.
The best way to build and maintain wealth is to not spend more than you earn and save as much as you can from each pay check. Contributing to employer sponsored retirement accounts (401ks, etc.) and IRAs, along with taxable investment accounts on a regular basis will help your savings grow over time. Invest in low cost funds and investments that can provide some downside protection can help enhance returns and provide some level of stability. Tuning out the noise and remaining
invested, even during periods with negative returns, can improve your returns over a longer-time horizon. Some other helpful tips can be found in our previous blog, The Do’s and Don’ts of Investing. If you are currently not investing for your future, what are you waiting for?
Schedule a free consultation with one of our advisors and we can help put you on the right path.