Don't Hesitate on This Industry Boom That's Already Here

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If you follow the headlines, you'd think the last place to invest your hard-earned money is in healthcare.

After all, Obamacare remains one of the most polarizing pieces of legislation enacted in a generation.

Consider that a new poll by Rasmussen Reports shows that just 39% of likely U.S. voters have a favorable opinion of the Affordable Care Act, while 54% view it unfavorably.

It will also play a huge role in this year's congressional elections.

A new poll by USA Today and the Pew Research Center found that 54% of those surveyed say a candidate's stance on Obamacare is "very important" in deciding the election.

But here's the thing. As technology investors, our job is to look beyond the politics of the moment and take a look at what others may be missing.

Turns out, if you picked the right healthcare investment over the last two years, you would have beaten the S&P 500's returns by more than 50%. And here's why…

This Demographic Trend Is a Rock-Solid Profit Foundation

And the reason is simple – despite our political climate, companies that can bring new advances to the market in a cost-effective manner and firms that can help control rising health expenses are witnessing a boom in demand for their products and services.

That means new drugs, medical devices, and technology platforms that keep a lid on costs will continue to do well no matter what happens with the midterm elections and Obamacare.

The demand for healthcare will only grow. The United States has more than 76 million Baby Boomers, those born from 1946 to 1964. They are living longer, more active lives and getting the medical treatments needed to do so.

Thus, we have years of sustained demand for healthcare, as well as medical technology, benefits processing platforms, biotech, new drugs, and devices like artificial knees and hips.

But there's just one problem. The sheer volume of potential stocks in all the affected sectors presents us with a bewildering number of choices.

And in such a fluid, dynamic market, separating the long-term winners from the losers and the also-rans is no easy matter.

Here's the Best Door into a Crowded Room of Choices

That's why investors would do well to take a good look at First Trust Health Care AlphaDEX (NYSE: FXH) ("First Trust Healthcare"). This investment gives us access to several sectors within the overall healthcare field. These include pharmaceuticals, life sciences tools, medical equipment and services, as well as biotech and healthcare providers.

With just this one investment we get insurance, medical records technology, genetics, and even in vitro diagnostics.

Clearly, this fund has an excellent mix of companies. Let's start with Stryker Corp. (NYSE: SYK), a medical device firm that is a leader in hip and knee joint replacements.

Then there's Charles River Laboratories (NYSE: CRL). The company provides outsourcing for clinical research, allowing drug firms to keep their overhead down and pass the savings on to patients and their insurers.

But that's just a taste of what this broad ETF has to offer. The top 20 holdings read like a "Who's Who" of medical science.

These are companies that will do well no matter how the nation chooses to manage its healthcare dollars:

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About the Author

Michael A. Robinson is one of the top financial analysts working today. His book "Overdrawn: The Bailout of American Savings" was a prescient look at the anatomy of the nation's S&L crisis, long before the word "bailout" became part of our daily lexicon. He's a Pulitzer Prize-nominated writer and reporter, lauded by the Columbia Journalism Review for his aggressive style. His 30-year track record as a leading tech analyst has garnered him rave reviews, too. Today he is the editor of the monthly tech investing newsletter Nova-X Report as well as Radical Technology Profits, where he covers truly radical technologies – ones that have the power to sweep across the globe and change the very fabric of our lives – and profit opportunities they give rise to. He also explores "what's next" in the tech investing world at Strategic Tech Investor.

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  1. Curtis Edmark | July 18, 2014

    Health care has historically been recession proof for the most part.

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