How to Invest in Prison Stocks

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Whether you're investing in stocks for a rainy day fund or a retirement plan, you can build long-term wealth with a diverse investment portfolio. As your portfolio grows, you may find that you have invested in prison stocks on Robinhood or your brokerage account of your choice and not realize it. Understanding the prison industrial complex and how investments in prison stocks work can help you avoid making unwanted investments.

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What Are Private Prisons?

Private prisons are privately owned facilities that profit off of the incarceration of people. They're part of a larger network of companies, legislators, government systems and investors known as the prison industrial complex. Other companies involved in the network are goods and services companies that sell items at inflated prices to incarcerated people and prison labor companies that pay low to no wages for incarcerated peoples' labor, the team at Forbes writes.

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According to the Sentencing Project, an organization dedicated to promoting and educating people on the need for systemic change in the criminal justice system, private prisons hit their peak in 2012 with ​137,220​ people incarcerated in private prisons across the country. Since then, the numbers have decreased ​16 percent​ to ​115,428​ people in 2019, making up ​8 percent​ of the total state and federal prison population.

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According to the American Civil Liberties Union (ACLU), private prisons held nearly three-quarters of federal immigration detainees in 2016, as reported by the U.S. Immigration and Customs Enforcement.

Most Prominent Prison Stocks on Robinhood

The three most prominent companies running private prisons in the United States are CoreCivic (previously known as the Corrections Corporation of America), GEO Group and Management & Training Corporation (MTC).

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Of the top three, only CoreCivic (CXW) and GEO Group (GEO) are publicly traded in the New York Stock Exchange. The performance of these stocks is tracked on the NYSE Composite Index, which tracks the price movements of all common stocks on the New York Stock Exchange, the U.S. Securities and Exchange Commission (SEC) writes.

One can invest in these prison stocks on Robinhood and other brokerage accounts. While these companies are the most prominent publicly traded companies running for-profit prisons, they are not the only publicly traded companies involved in the prison industrial complex. In fact, you can be invested in the network and not realize it.

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Companies Part of the Prison Industrial Complex

A prison stocks list can be found on Prison Free Funds, an organization dedicated to identifying publicly traded companies involved in the prison industrial complex and the border industry. They also provide tools to help expose how much of your mutual fund investments and 401(k) is invested in the complex.

For example, Acadia Healthcare Co (Nasdaq: ACHC) is a healthcare company that provides residential re-entry programs. It's also involved in the border industry by detaining a small number of unaccompanied immigrant youth, Prison Free Funds writes. Aramark (NYSE: ARMK) provides food, commissary and other goods, as well as prison labor, to the prison industrial complex. SuperCom Ltd. (Nasdaq: SPCB) is another company involved in the complex. The company owns the California-based Leaders in Community Alternatives (LCA), an electronic monitoring and community corrections company, providing community corrections and e-incarceration to the prison industry, Prison Free Funds writes.

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Investing in prison stocks is a personal choice; however, if you would like to avoid it, it's essential to understand that the complex extends further than private prison operators. Research is critical to wise investments.

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