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The Safe, Sure Way to Profit from Obamacare's New Customers

By Dr. David Eifrig, editor, Retirement Millionaire
Wednesday, January 29, 2014

We would have dismissed it as science fiction just a generation ago...
The pace of medical progress over the past 20 years is astounding. In the course of our lifetimes, we've gone from diagnosing patients with little more than a stethoscope and a flashlight to using an array of diagnostic tools.
We can peer into the body and examine every tissue with MRIs. We can draw blood from the body, pick out certain cells, attach things to them, and put those cells back in to kill cancer.
And as technology evolves and improves... the role diagnostics, data, and medical devices play in our health care will only grow over the coming decades.
We're only at the beginning of this trend...
Just this month, genetics company Illumina announced a new machine that will sequence an entire person's genome for $1,000 a pop. The same sequencing cost $100 million just a decade ago.
Even aside from medical advances, demand for testing and other supplies will boom in the coming years.
People 65 years old and older currently make up nearly 13% of the population.
But that figure will swell to 19% by 2030... representing an additional 32 million elderly people. And the key: Just about everyone spends more money on health care as they age. For example, older people use three to four times the amount of prescription drugs as folks under 50.

And the government's new "Obamacare" health regime will drive 20 million previously uninsured patients – more than 6% of the U.S. population – into the health care system over the next decade.
This means more people in the ICU and the hospital. That means more needles, tubes, and tests... more demand for just about everything related to health care.
I'm not a fan of Obamacare... but I know the resulting health care boom means we have to be invested in health care for the long term.
For folks who like to buy individual stocks, this can mean owning pharmacy companies like CVS... or big drug companies like Eli Lilly. We own both of these companies in my Retirement Millionaire service... and we're making great money (both are up more than 75% for us).
If you prefer diversified investments like mutual funds or exchange-traded funds (ETFs), consider something like the Health Care Select Fund (XLV) from State Street Global Advisors.
It's a diversified fund that holds 55 of the best, most well-capitalized and successful health care companies in the country – companies like Johnson & Johnson, Pfizer, and Merck. Its top 10 holdings make up 56% of its portfolio.
% Assets
Johnson & Johnson (JNJ)
Pfizer (PFE)
Merck (MRK)
Gilead Sciences (GILD)
Amgen (AMGN)
Bristol-Myers Squibb (BMY)
AbbVie (ABBV)
United Health Group (UNH)
Celgene (CELG)
Biogen Idec (BIIB)

These large, stable companies don't often come out with shocking announcements that rock their share prices. But even if they do, owning so many stocks makes the effects of a single announcement virtually nil.
By owning a fund like XLV, you don't have to pick the winners and losers from the health care field. With one click, you set yourself up to benefit from the 20 million new health care customers, no matter where they end up.
However you decide to own health care investments, I urge you to buy them soon. We have a multi-decade tailwind at our backs. And we have a huge new source of demand coming from Obamacare.
That makes the health care sector a sure bet in the coming years.
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig

Further Reading:

Find more investing advice from Doc right here:
The Easiest Place to Start Investing
Most people reach a point where they ask the question: "How can I get started investing?"
A Simple Formula for a Successful Portfolio
"If you've got a little bit more money and an interest in learning how to pick your own investments, you can create your own diversified portfolio."
Gold Won't Protect You from Inflation... This Will
Many folks believe the "myth" that as the price of everyday goods we buy rises, the price of gold increases in lockstep. But in reality, it doesn't work that way... And there's a MUCH BETTER inflation hedge out there...

Market Notes


Steve Sjuggerud has been vocally bullish on housing over the last few years... And he has been dead-on.
Three years ago yesterday, Steve told DailyWealth readers, "Right now is the best time in history to buy a house in America." In the March 2011 edition of his True Wealth newsletter, he told subscribers they could take advantage of the situation by buying the iShares U.S. Home Construction Fund (ITB).
The fund holds shares in big homebuilders like PulteGroup. It also owns companies that do well in a good housing market, like Home Depot. Steve's subscribers are up about 87%... And he says there's more to come. "Because U.S. housing is still REALLY affordable... It's darn cheap!"
As you can see in the chart below, ITB's huge run peaked in May 2013... And it has been consolidating those gains since. It has been stuck in what traders call a "box." But with home prices and existing home sales rising, and a limited supply of homes on the market, we expect Steve will continue to be right... and ITB will soon "break the box" to the upside.

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