Dear Mr. Berko: This year, I plan to put $6,500 in my individual retirement account into the American Funds Global Balanced Fund, which my stockbroker says will outperform the stock market in the coming decade. I am 60 and intend to work till I’m 70. What is your opinion of American Funds?
Also, a friend working for Constellation Brands suggested I buy stock in his company because it’s going to be big in the cannabis business. He says it’s public knowledge. I’d appreciate your thoughts.
— L.D., Moline, Ill.
Dear L.D.: Of course the broker wants to sell a mutual fund. The American Funds Global Balanced Fund (GBLAX) pays your broker a 5.75 percent sales fee, but that fund’s poor record is an embarrassment. Go to Charles Schwab and buy 30 shares of Constellation Brands.
Marijuana is surreptitiously everywhere but difficult to get in most states unless you’re intimate with the dark alleys, motorcycle bars and seamy edges of your city. Constellation Brands (STZ-$221) is an $8 billion producer and marketer of beers, wines and the harder stuff. If you’ve gotten a buzz from a Corona, a Modelo, a Robert Mondavi, a Woodbridge, a Taylor, a Paul Mason, a Ruffino or a Manischewitz, you’re an STZ customer. Black Velvet, Wild Irish Rose, McMasters, Svedka and Casa Noble are also popular STZ drunk kits. STZ markets a passel of outstanding craft beers — plus an intriguing range of craft whiskeys produced by High West, a recent STZ acquisition. Because these labels provide a high-end buzz, they augur top- and bottom-line growth. Some 93 percent of sales derive from the U.S., while Canada, New Zealand and Europe claim the remaining 7 percent. STZ has been on a buying spree for the past few years, recently acquiring Funky Buddha, a craft brewer that’s among the fastest-growing labels in Florida. While beer is STZ’s most significant growth product, management’s diversification is aimed at growing the company’s long-term revenue and earnings. Read on. As your friend said, the best is yet to come.
