The health care industry has always played a role in investment strategy; some of the world’s largest companies are in healthcare. Health care continues to be one of the major talking points in news and current affairs, and government intervention often results in increased investment into the sector. Overall, health care continues to be a growth area and continues to provide very promising investment opportunities.
Why invest in health?
Investing in healthcare is a good choice because it will always have excellent long-term growth potential. The global population continues to increase, along with life expectancy; therefore, it is logical to assume more people will be in need of healthcare in the future.
In addition, governments are always keen to protect healthcare and demonstrate that the health of the nation must come first. This guarantees long-term investment, which in turn leads to growth and profitability.
The future of health
The health care sector is extremely diverse and there are many investment opportunities. One approach is to invest in research and development companies that are looking for new ways to fight cancer. Another way is to invest in companies that are developing new drugs for common chronic conditions, such as diabetes, heart disease and hypertension. It is also worth looking at companies that work on developing new vaccines and treatments for extremely prevalent diseases such as dementia and malaria.
Investing in the health sector brings many opportunities. Large, well-established blue chip companies provide very safe investments with good dividend yields; these companies provide a steady income from your investment.
Other companies provide huge opportunities for large capital gains. It is also worth considering smaller companies that may be subject to takeovers and mergers in the future. If a small laboratory demonstrates that it is achieving success in a very profitable and competitive area, one of the large multinationals may make a hostile bid, and this can be very lucrative for investors.
It is a good idea to look at successful investors in this area to learn how they make their investment decisions and to get some insights in the latest thoughts on healthcare investments. Fisher Investments is a good first point of contact. They share their latest analytical thinking and opinion through their digital platforms, and company data is available on the Fisher Investments on Crunchbase page.
Analyse the market
The best way to analyse the market is to read reports from leading investors. For example, the Fisher Investments on Health Care sector guide, which is available on Amazon, provides information and tools to help investors analyse and understand how to invest in healthcare.
Is now a good time for investment in this sector?
Now is possibly the best time to start investing in health care. Global markets are showing strong signs of growth once again, and health care continues to be one of the main concerns. As the world has become more interconnected due to the internet, medical companies have discovered that there are huge new emerging markets that require top quality healthcare.
How to build a stock portfolio
Investors should look to build a diversified stock portfolio in the healthcare sector that includes large blue chip companies and a selection of R&D companies. It is also a good idea to look to international markets for companies that are set to grow in the future.
If you wish to invest in the biggest companies, you will need to sink some money into the American healthcare companies Procter & Gamble, Pfizer, and Johnson & Johnson, all of which are ranked in the top 100 companies in the world.
Types of investment
There are many ways to invest in the healthcare sector. One way is to invest directly into a healthcare provider or research company. Another option is to invest in an investment trust or unit trust that specialises in health.
Health tech is a massively growing area, so investing in tech companies that are working in partnership with the healthcare industry can provide excellent growth potentials. Some of the most exciting developments are coming from smaller companies that apply the internet to their diagnostics tools to provide monitoring and diagnosis solutions.
An investment into health insurance is another option; although this is not strictly in the healthcare industry, it is another growth area that is supported by, and supports, healthcare. Another option is to invest in pharmacy benefit managers (PBMs), which are companies that administer drug benefits on behalf of insurance companies.
Health care, along with food and fuel, will continue to grow for the foreseeable future, and a good portfolio will provide a very attractive long-term return on investment.