Tags: healthcare | stocks | Obamacare | Gold

MarketWatch's Gold: Ignore Obamacare Train Wreck and Buy Healthcare Stocks

Friday, 15 Nov 2013 10:46 AM

By John Morgan

The best stock sector for investors to buy into now is healthcare, despite all of the chaos surrounding Obamacare, according to MarketWatch columnist Howard Gold.

In fact, Gold wrote he believes healthcare stocks "may have entered a secular bull market."

He said the analysts he spoke to do not believe the Affordable Care Act would be abandoned.

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"I think this is a question of when this gets resolved, not if," said Andy Acker, manager of Janus Global Life Sciences Fund. "Millions of people will sign up for healthcare."

Acker said he believes Obamacare will force consolidation among health insurers, producing "fewer larger insurers over the long term."

Terry Hisey, who heads the U.S. Life Sciences Sector at Deloitte LLP, told Gold, "Market forces in play . . . are actually having a bigger effect [than Obamacare]."

Gold noted the Healthcare Sector SPDR exchange-traded fund has soared 86 percent from Aug. 10, 2011, to this week, beating the Standard & Poor's 500 by almost 30 percentage points.

The healthcare sector is fairly broad — it includes biotechnology, pharmaceuticals, medical devices, hospitals and health insurers — and is undergoing structural transformation.

Gold cited competition, pricing pressures, growing efficiency and innovation as factors in play — all combined with an aging population, plus a growing middle class in emerging nations.

"Demographics and economics could propel this sector higher for years," he predicted.

Eddie Yoon, manager of Fidelity Select Healthcare Fund, said, "Healthcare has been an outperforming sector for a very long time. It provides a lot of stability and a lot of exposure to tailwinds that are happening globally."

Gold recommended investors take a look at broad-based healthcare sector funds rather than narrow ones such as biotech funds.

Stephen Weiss of Short Hills Capital agrees the healthcare sector is still attractive despite the failed rollout of Obamacare.

"You still have to be in a group that continues to grow whether the economy's growing or not growing, so I like it," he told CNBC.

"This is an unmitigated disaster," Weiss said of the catastrophic problems in Obamacare's enrollment process. "The end of the day, I don't think it matters."

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