When you think about investing to powerfully grow your money into the future, what giant long-term trends come to mind first?
Certainly anything on the cutting edge of technology does -- from mobile, the cloud, and AI to robotics, alternative energy, and autonomous cars.
But do you know what sector is bigger than technology and has trounced it by 3 times since 1999?
Healthcare. And it offers just as much innovation, if not more -- with more diversification. If you are investing for the future, you need exposure to the healthcare sector to grow truly life-changing wealth.
But what about the impending "repeal and replace" of Obamacare and all the Washington saber-rattling over drug prices? Don't these make the sector "un-investable?"
To the contrary, any policy moves offer only more opportunity in the 750 companies and 12 industries to choose from. And bigger picture, healthcare profits are still being driven by four big forces that won't stop for another decade at least.
The 4 Megatrend Drivers of Healthcare Profits
1) Boomer Power: An aging population living longer means more care is needed into the "active 90s!"
The demographic trends are clear: US and global populations are aging, as the Millennial baby boom may not be rivaled any time soon.
Plus, people are living longer on average just because of improving economic standards, the quality of food, water, and medical care, and an awareness of health dangers like smoking.
More . . .
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This adds up to a big increase in the number of people living into their nineties. And that means more innovative care will be needed from several medical industries, including pharmaceuticals, cardiovascular technologies, neurological treatments, hospital equipment and instruments, biotechnology, and cancer research discoveries.
2) Science Power: The breakthroughs in genetics and technology are creating new life-saving and life-enhancing companies as I write.
The age of genetics has ushered in unprecedented advances in scientific and medical research. We have gone from understanding and battling disease with scalpels and poisonous chemotherapies to treating cancer with targeted genetic breakthroughs and vaccines created from one's own immune system.
This megatrend is nowhere near slowing down as companies, investors, and charities pour billions of dollars every year into new R&D to cure everything from heart and digestive ailments to pediatric and neuro-degenerative diseases.
3) Earnings Power: The follow-on from all that R&D are new products and solutions creating new channels of sales and profits.
In 2016, the healthcare sector was responsible for over 40% of the earnings in the S&P 500, bigger than the financial, energy, and telecom sectors combined. And the strength of this profit engine is only enhanced by its diversity across hundreds of companies and a dozen space-age industries.
The beauty of this wealth of investing opportunities is that when one area is out of favor due to political or regulatory headwinds, there are always three or four other industries creating dynamic sales and profit growth.
4) M&A Power: The big Pharma companies need to keep their pipelines full and avoid the revenue drops created by "patent cliffs."
During this bull market, over $500 billion in deals have been done, mostly by big drug companies buying emerging biotech plays for 50-100% takeout premiums.
One of my favorite biotech investments of the past few years was a company called Medivation, which got snatched up by Pfizer for $14 billion in 2016 -- but not before a bidding war was fought by some of the biggest names in pharma, forcing Pfizer to pay top dollar.
While the pace of M&A may slow down from the frenzy we've seen the past few years, it will always be a positive force driving values in the sector -- especially if any tax reform policy unleashes a tidal wave of overseas corporate cash onto US shores.
The Power of Vision
These 4 megatrends don't look like they will stop in this decade. And probably not in the next one either! So make sure you have a long-term investing plan to capitalize on them.
I know I'll be looking for the next Intuitive Surgical, which made new all-time highs this week and handed early investors a 4,200% return since June of 2000.
If you'd like to target big gains like this, I invite you to join me inside Zacks' newest investment portfolio, Healthcare Innovators.
The confluence of the megatrends above are setting up what may be the most exciting investment opportunity of our lifetimes. Healthcare Innovators is designed to capitalize on these powerful forces and hand investors some of the biggest gains they've ever seen.
Now, picking the best stocks in this sector requires a considerable amount of research. But if you make the right calls, the reward can be phenomenal.
But you don't have to follow FDA filings or subscribe to medical journals. That's my job! Healthcare Innovators enables you to piggy-back on my in-depth research.
I've kept a close eye on 3 companies at the forefront of the next wave of cancer treatment, what the National Cancer Institute has called "a class of living drugs." These companies could change the world. I reveal them and a number of other promising stocks positioned to capitalize on one or more of the megatrends we've talked about.
You can be among the first to see these picks, by clicking the link below. Please note: We must limit the number of investors who share this information. Access closes Sunday, April 23.
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Kevin, Senior Stock Strategist at Zacks, is a leading expert in biotech and medical stocks. He now provides commentary and recommendations for Zacks' new investment portfolio, Healthcare Innovators.
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