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
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
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21
UK Covid-19 Booster Jabs Moderna, Pfizer Are They Worth the Risk of Side effects, Illness? - 22nd Nov 21
US Dollar vs Yields vs Stock Market Trends - 20th Nov 21
Inflation Risk: Milton Friedman Would Buy Gold Right Now - 20th Nov 21
How to Determine if It’s Time for You to Outsource Your Packaging Requirements to a Contract Packer - 20th Nov 21
2 easy ways to play Facebook’s Metaverse Spending Spree - 20th Nov 21
Stock Market Margin Debt WARNING! - 19th Nov 21
Gold Mid-Tier Stocks Q3’21 Fundamentals - 19th Nov 21
Protect Your Wealth From PERMANENT Transitory Inflation - 19th Nov 21
Investors Expect High Inflation. Golden Inquisition Ahead? - 19th Nov 21
Will the Senate Confirm a Marxist to Oversee the U.S. Currency System? - 19th Nov 21
When Even Stock Market Bears Act Bullishly (What It May Mean) - 19th Nov 21
Chinese People do NOT Eat Dogs Newspeak - 18th Nov 21
CHINOBLE! Evergrande Reality Exposes China Fiction! - 18th Nov 21
Kondratieff Full-Season Stock Market Sector Rotation - 18th Nov 21
What Stock Market Trends Will Drive Through To 2022? - 18th Nov 21
How to Jump Start Your Motherboard Without a Power Button With Just a Screwdriver - 18th Nov 21
Bitcoin & Ethereum 2021 Trend - 18th Nov 21
FREE TRADE How to Get 2 FREE SHARES Fractional Investing Platform and ISA Specs - 18th Nov 21
Inflation Ain’t Transitory – But the Fed’s Credibility Is - 18th Nov 21
The real reason Facebook just went “all in” on the metaverse - 18th Nov 21
Biden Signs a Bill to Revive Infrastructure… and Gold! - 18th Nov 21
Silver vs US Dollar - 17th Nov 21
Silver Supply and Demand Balance - 17th Nov 21
Sentiment Speaks: This Stock Market Makes Absolutely No Sense - 17th Nov 21
Biden Spending to Build Back Stagflation - 17th Nov 21
Meshing Cryptocurrency Wealth Generation With Global Fiat Money Demise - 17th Nov 21
Dow Stock Market Trend Forecast Into Mid 2022 - 16th Nov 21
Stock Market Minor Cycle Correcting - 16th Nov 21
The INFLATION MEGA-TREND - Ripples of Deflation on an Ocean of Inflation! - 16th 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