Your Financial Future: Top 4 Ways to Invest in Healthcare Stocks
Good health is the key to life. It’s also a good investment. Look out for your financial future by learning the top four ways to invest in healthcare stocks.
The global healthcare industry is one of the largest in the world, valued at over $7 trillion in 2019. This is a figure that is only projected to grow, as populations age and companies find ever-more innovative ways to treat patients.
Our approach to healthcare is unsurprisingly one of the safest and most popular investment options. The stock of specific companies and providers fluctuates. However, the overall industry is one that is showing no signs of declining anytime soon.
Healthcare providers also benefit from investment in health stocks. This is because it gives them the capital to improve their research and treatment. If you’re considering investing in healthcare stocks, read on for the best four ways to do it.
1. Invest in Medical Technology Healthcare Stocks
One rapidly growing sector that produces particularly high returns is medical technology and devices.
This can include patient treatments such as nanotechnology devices or prosthetic limbs. It also includes technology used to improve hospital operations.
One particularly flourishing area within the best healthcare stocks is cloud-based SaaS services. Providers use these to safely store and share sensitive data.
The industry is currently dominated by a few companies, so make sure to research things like Veeva vs Cerner stock before making an investment decision.
2. Invest in Hospitals and Clinics
In America, healthcare providers such as clinics and hospitals frequently make stock available for people to invest in. They tend to offer similar returns to pharmaceutical stocks, although they also carry more risk.
Hospitals are sensitive to ever-changing regulations. Individual healthcare facilities are more prone to poor business decisions than larger pharmaceutical companies. The returns can be very good, but the risk is also high.
Hospitals are also highly prone to acquiring bad debt. Try and get a detailed picture of the financial health of an institution before investing.
3. Invest in Pharmaceutical Companies
When looking for the top pharmaceutical stock, there are countless investment options. Most people think that the best pharmaceutical stocks are those of ‘Big Pharma’. These are the five or so companies that command the majority of market share.
However, this isn’t always the best option. Stocks in the biggest pharmaceutical companies are very expensive, and the returns can be lukewarm.
Smaller drugs companies can promise much larger returns for a much smaller investment. This is especially true if they’re in late-stage R&D for a drug.
The vast majority of prescription and OTC drugs in the world are produced by American companies. However, investors should consider looking further afield to other big players such as the UK and China.
4. Invest in Insurance Providers
While the Affordable Care Act was touted as a death knell for insurance providers, it seems that the opposite has been the case.
American insurers are continuing to enjoy near-record growth and revenues. This is partly because premiums are growing at unprecedented rates.
Some of the top healthcare stocks in the world are US insurance companies. Big players such as United Health and Anthem showed some of the healthiest growth figures this year.
Investing in healthcare stocks is just one way to safeguard your financial freedom.
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