Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Dow Stock Market Trend Forecast Into Mid 2022 - 4th Dec 21
INVESTING LESSON - Give your Portfolio Some Breathing Space - 4th Dec 21
Don’t Get Yourself Into a Bull Trap With Gold - 4th Dec 21
GOLD HAS LOTS OF POTENTIAL DOWNSIDE - 4th Dec 21
4 Tips To Help You Take Better Care Of Your Personal Finances- 4th Dec 21
What Is A Golden Cross Pattern In Trading? - 4th Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - Part 2 - 3rd Dec 21
Stock Market Major Turning Point Taking Place - 3rd Dec 21
The Masters of the Universe and Gold - 3rd Dec 21
This simple Stock Market mindset shift could help you make millions - 3rd Dec 21
Will the Glasgow Summit (COP26) Affect Energy Prices? - 3rd Dec 21
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - 30th Nov 21
Omicron Covid Wave 4 Impact on Financial Markets - 30th Nov 21
Can You Hear It? That’s the Crowd Booing Gold’s Downturn - 30th Nov 21
Economic and Market Impacts of Omicron Strain Covid 4th Wave - 30th Nov 21
Stock Market Historical Trends Suggest A Strengthening Bullish Trend In December - 30th Nov 21
Crypto Market Analysis: What Trading Will Look Like in 2022 for Novice and Veteran Traders? - 30th Nov 21
Best Stocks for Investing to Profit form the Metaverse and Get Rich - 29th Nov 21
Should You Invest In Real Estate In 2021? - 29th Nov 21
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

3 Ways to Play the Ageing Population Healthcare Surge

Companies / Healthcare Sector Dec 31, 2019 - 05:49 PM GMT

By: Robert_Ross

Companies 2019 was a good year for stocks. 

US stocks have rocketed 28% this year. This is the second largest annual gain since 1999. And the tenth straight year stocks have climbed higher.

This has a lot of investors worried that stocks could tank soon. But this bull market is far from over. My research shows stocks should continue to rise until at least September 2020.

And falling interest rates could help that happen… especially for healthcare stocks.


Falling Rates Push Healthcare Stocks Higher

In July, the Federal Reserve cut interest rates for the first time in over a decade.

As a general rule, lower rates tend to push stocks higher—largely because it makes it cheaper for businesses to borrow and fuels spending.

Lower rates prop up healthcare stocks in particular. According to Barclays, they outperform the S&P 500 by an average of 7% in the nine months after an initial interest rate cut, like the one we saw in July.

That was almost five months ago. And the SPDR Health Care Sector ETF (XLV) has climbed 9% since. That’s nearly double the S&P 500’s 5.4% return, as the next chart shows.



I’ve covered three ways to play this trend back in JulyJohnson & Johnson (JNJ), AbbVie Inc. (ABBV), and Abbott Laboratories (ABT). Since then, these stocks have climbed an average of 10.1%:



That’s more than double the S&P 500’s return over the same period.

Impressive. But remember, if the pattern holds, we’re only halfway through this trend.

The Longview—We’re Getting Old

There are lots of reasons to like healthcare stocks.

To start, America is graying. The share of Americans age 65 and up will jump from 15% in 2018, and up to 21% by 2030.

This has straightforward implications: as people get older, they need more medical care. And it’s one of the last things people skimp on.

In fact, US healthcare spending will grow 5.5% annually through 2027, according to the Centers for Medicare and Medicaid Services (CMS).



Consistent spending means healthcare companies earn stable profits, pretty much no matter what.

This makes healthcare stocks ideal for income investors like us.

My New Top Healthcare Picks

Long-term increases in healthcare spending will push healthcare stock prices higher. Add in the short-term interest rate tailwind I mentioned earlier, and you’ve got good reason to hold healthcare stocks today.

The world’s largest medical device company, Medtronic plc (MDT), is at the top of my list. The company makes pacemakers, insulin pumps, and surgical tools.

The aging US population will keep these products in high demand for decades. This makes Medtronic’s stock and its 2.0% dividend yield very reliable.

Next on my list is global drug company GlaxoSmithKline PLC (GSK).

GlaxoSmithKline makes a variety of well-known medications, from the nasal spray Flonase, to the antidepressant Wellbutrin, to the antacid Zantac.

The company also holds key patents for highly profitable respiratory and antiviral therapies. This gives it very stable sales and profits.

Best of all, GlaxoSmithKline pays a reliable 4.2% dividend yield. That’s over twice the dividend yield on the S&P 500.

Finally, we have Merck & Co. Inc. (MRK), another major global drug company. Merck makes a broad range of products, from HIV therapies to insomnia medications and fertility drugs.

It’s also a leading maker of cancer treatments. We all know many cancers get more common with age. So the graying US population will keep Merck’s cancer therapies in high demand.

The company also pays a safe 2.7% dividend yield, which is great for income investors.

Again, I expect this bull market to keep chugging along into 2020. There’s plenty of upside left.

But you still want to control risk by holding safe and reliable dividend-paying stocks. Medtronic, GlaxoSmithKline, and Merck fit the bill.

The Sin Stock Anomaly: Collect Big, Safe Profits with These 3 Hated Stocks

My brand-new special report tells you everything about profiting from “sin stocks” (gambling, tobacco, and alcohol). These stocks are much safer and do twice as well as other stocks simply because most investors try to avoid them. Claim your free copy.

By Robert Ross

© 2019 Copyright Robert Ross. - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in