Best Investment For The Next Decade? [Merck & Co., Inc., Pfizer Inc., Johnson & Johnson, UnitedHealth Group Inc.]

healthcare1George Leong: In spite of the debate over whether Obamacare, also known as the Affordable Care Act, is good or bad for the nation’s healthcare sector, what I do know is that the additional policies will likely drive up the demand for healthcare services and products as an investment opportunity.

Now I’m not here to debate or discuss the merits of the healthcare plan. All I can say is that if we can get people enrolled in some sort of healthcare plan, then as far as I’m concerned, that’s great for the country and its citizens. Studies have shown that in the countries where healthcare is available to everyone, there tends to be a higher happiness factor and people live longer.

But back to the investment opportunity: Obamacare will add tens of millions of Americans to the healthcare system, Americans who previously had little or no coverage but will now have access to basic healthcare. The result is a significant increase in demand across the board—and as I said earlier, this will translate into a rise in healthcare stocks as an investment opportunity.

At first glance, the big pharmaceutical companies, such as Merck & Co., Inc. (NYSE:MRK), Pfizer Inc. (NYSE:PFE), Johnson & Johnson (NYSE:JNJ), and UnitedHealth Group Incorporated (NYSE:UNH), are an investment opportunity directly benefiting from the move. These are excellent long-term healthcare stocks that have proven themselves over the long haul and could offer a good investment opportunity.

If you would rather play the healthcare boom via a fund, take a look at an exchange-traded fund (ETF) that comprises of numerous key healthcare companies that could rally from Obamacare and provide an investment opportunity. An example of such an ETF may be Health Care Select SPDR (NYSEARCA:XLV).

The chart below shows the nice upward move in the Health Care Select ETF since mid-2012. There is some current congestion on the fund’s chart, but I feel the trend will remain positive based on my technical analysis.

Health Care Select sector Chart

Chart courtesy of www.StockCharts.com

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