Many investors agree that health is true wealth. But this motto can be taken figuratively and literally for investors who pursue investments in the healthcare sector.
Healthcare is one of the more complex sectors that is made up of different industries. It covers anything from pharmaceutical research & development to health administration, real estate, and even insurance. Investors should understand that these specific industries are quite unique in how they operate and the risk that’s associated with them.
Generally, the health care services and health insurance industries are more stable and carry less risk than the biotech industry at the trade-off of lower growth opportunities.
The Healthcare sector is typically described as a defensive sector with positive growth. As our need for health care is persistent, health care stocks generally have low correlation with global macro conditions, an aspect that has made it one of the strongest performers in recessionary periods.
Meanwhile, the element of positive growth comes from developments such as rising longevity worldwide, technological advances, and personalized medicine. Long-term health trends - be it positive or negative - also tend to provide growth opportunities for the healthcare sector. The obesity and diabetes epidemics in the West and the global aging population trends are examples of trends that are negative for the overall well-being of the population but lead to increased funding and patient growth in healthcare.
Below is a mix of companies that are well-positioned within the healthcare industry to service the above mentioned long term trends.
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Simply Wall St analyst Stjepan Kalinic and Simply Wall St have no position in any of the companies mentioned.