The healthcare sector is made up of many different industries – from pharmaceuticals and devices to health insurers and hospitals – and each has different dynamics. Investments in this sector are affected by many variables, including positive trends related to demographics and negative trends related to reimbursement.
Healthcare-related stocks have been a great place for many investors to continue to make money during the brutal bear market. With increasing demand for many of the different healthcare-related services and promised reform of the healthcare system, which more than likely will bring increased government spending, countless investors are contemplating whether now is the time to go into healthcare-related stocks. An ETF with good coverage of the healthcare sector would be the Health Care SPDR ETF (NYSE:XLV), which was up 2.38% in January.
IN PICTURES: 8 Great Companies With Top-Notch Healthcare Benefits
A global approach to investing in healthcare factors in the growing health needs of domestic baby boomers along with healthcare demands of the larger world around us. Globally, the World Health Organization predicts higher levels of cancer and heart disease as populations in middle- and low-income countries age over the next 25 years. (Learn how to diversify your portfolio by reading Going International.) For investors interested in this theme, they can buy the iShares S&P Global Healthcare Fund (NYSE:IXJ), which was up 2.23% in January.
Here are January's winners:
January's Best-Performing Healthcare Stocks
|Clinical Data, Inc. (Nasdaq:CLDA)||+90.46%|
|Sunrise Senior Living Inc. (Nasdaq:SRZ)||+52.28%|
|Imris Inc. (Nasdaq:IMRS)||+40.17%|
|Valeant Pharmaceuticals International (NYSE:VRX)||+37.82%|
|DepoMed Inc. (Nasdaq:DEPO)||
Investing in healthcare stocks can provide generous returns, but it is also tedious due to the many factors affecting stock prices. The healthcare sector is vast, and there are many large and small companies to choose from in various industries. To help ease the burden, there are investment vehicles like ETFs and healthcare mutual funds in which you can invest; they can reduce the volatility of investing in individual stocks by diversifying holdings. (Read more about diversification and investing in our Risk And Diversification tutorial.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!