As investors re-evaluate their stock portfolios and look to make sense of the new health care reform legislation, a big question now is whether health care stocks are still worth buying.
The sector is still attractive despite recent strong returns and concerns about reform.
Health care stocks have long been regarded by investors as conservative, defensive positions. Their product portfolios include a range of necessary and desirable products.
Health care companies typically hold up well during difficult market environment due to characteristics including patent protection.
The same factors that have made these stocks attractive over the past couple of years remain in place.
Older Americans spend far more on health care then younger people. Internationally, the story is similar. Many nations are moving to increase access to health care services.
Increased access to health care globally means more patients and, consequently, more opportunities for growth of the health care sector. Such growth should be supplemented by an inevitable growth in health care spending on a per-capita basis.
Health care companies have traditionally generated strong free cash flow and are likely to continue doing so.
One influence that remains is the effect of health care reform in the US. Reform will likely increase access for patients and boost volume, helping to offset pricing pressures and cost controls.
Just as doctors advise patients that they shouldn't neglect their health, it would appear that investors would benefit y not neglecting health care stocks in their portfolios
Health care will always be needed and mostly by the older population. So health care stocks are interesting to invest in. They will always have a profit because of the new methods, research and development.
My blog was based upon this article: http://www.investmentnews.com/article/20100411/REG/304119990
Masschelein Liesbeth
2FV4
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