If You Use Healthcare…Own Healthcare

Investing in Healthcare Businesses Makes Long-Term Sense

No matter your age or life stage (e.g., starting a career or retiring), owning shares of companies involved with healthcare could result in excellent future profits and/or an excellent current income source. This became more evident to me during my recent bout with prostate cancer, as I was the beneficiary of numerous medical “miracles” (services and treatment) that allowed me to defeat prostate cancer and live on in a productive retirement. This episode caused me to reflect more deeply on the medical and healthcare investment successes that I have enjoyed and that I would like to share with you in this blog.

With very favorable demographics (i.e., aging population, longer life-spans, and expanding insurance coverage), the need, demand, and funding for healthcare will continue to grow. Therefore successful investing in the healthcare sector can be achieved through many ways including investing in:

  • Ethical drug and biotech companies (e.g., Amgen: AMGN)
  • Medical instruments/devices (e.g., Boston Scientific: BSX)
  • Health insurance companies (e.g., United Healthcare: UNH)
  • Health services (e.g., Almost Family: AFAM)
  • Medical property management companies (e.g., Physicians Realty: DOC).

For Growth Investors

I believe the following health-related companies are well situated for continuing growth:

  • Amgen (AMGN) – a leading cancer drug development and manufacturing company
  • Biogen (BIIB) – a top biotech company that develops and manufactures new medicines
  • Boston Scientific (BSX) – A creator and provider of healthy heart instruments
  • United Healthcare (UNH) – The top health insurer, especially for seniors
  • Almost Family (AFAM) – A home care provider with a growing national network

For Income Investors

The following health care-related real property management companies with their steady and reliable dividend yields are best situated to provide very good current income (monthly or quarterly dividends) and some future growth:

  • Healthcare Trust of America, Inc. (HTA: 3.76% annual yield)
  • Welltower, Inc. (HCN: 4.73% annual yield)
  • Omega Healthcare Investors, Inc. (OHI: 7.03% annual yield)
  • Physicians Realty Trust (DOC: 4.51% annual yield)
  • Medical Properties Trust, Inc. (MPW: 6.24% annual yield)

Healthcare Mutual Funds and/or ETFs

For investors who prefer to invest using mutual funds and/or ETFs, I would suggest the following candidates:

  • IBB – iShares NASDAQ Biotechnology Index (ETF)
  • PJP – Power Shares Dynamic Pharmaceuticals (ETF)
  • VHT – Vanguard Health Care Vipers (ETF)
  • FBIOX – Fidelity Select Biotech (Mutual Fund)
  • FSPHX – Fidelity Select Healthcare (Mutual Fund)
  • FRESX – Fidelity Real Estate Portfolio (Mutual Fund)

I hope these suggestions will get you started on your way to investing in the long term benefits and profits that health care businesses can provide. There are few things better in life than staying healthy and making money too!

ANNOUNCEMENT: IBSS’s investment approach is focused on long-term investing. Therefore we will no longer make monthly stock market commentaries. However, we will announce timely periodic market comments if we believe there are significant developments that warrant a change in the asset allocation formulas in our “My Optimal Asset Allocation Analyzer” (MOAAA©) portfolio models. Please register for free for these announcements and/or any future blogs.

Good investing,

Jim Tso

Note: Jim Tso and his wife currently own all the investments mentioned in this blog.

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Jim Tso wants to “give back” and share his 35+ years of successful personal money management experience to help others to achieve their financial goals. Jim created this InvestBetterSpendSmarter blog (IBSS) to provide you with free investing, planning, savings, retirement, and inspirational tips derived from his unique, innovative, and proven approaches to money management. He welcomes and appreciates your feedback.

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