Update-1 12/21…a good day despite flat indices with the XBI up 1.68% to $150, IBB flattish at $156. Momentum still favors small cap speculation.
- Gene therapy stocks are running hard but I own EDIT up 29% to $84 ! Other big movers are CRSP,NTLA and SGMO.
- Coronavirus stocks are strong with new fears of mutations in the UK: GNMK up 5.77%, QDEL up 8.42%,vaccine stocks flat.
- Dx and tools have strength: EXAS, GNMK,NVTA, PACB, QDEL etc OSUR popped 5% but lacks a clear trend.
- AGIO up 28% on sale of oncology assets for about $2B, will focus on genetic diseases.
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Healthcare Investing Made Simple: Trade Less and Invest for the Long Term
- Stock picking may be harder than you think:did you pick big winners like BNTX,CRSP,IMMU,MRNA , QDEL?
- ETFs can be more volatile than mutual funds.
- Be diversified within healthcare: providers, medtech, biotech etc.
- The current momentum market still favors stock picks f you follow the market daily.
Over the past year in this volatile bull market you had many possible strategies for beating the market even with the S&P up 15% YTD. If you are a trader you may have done better because many stocks and sectors have beat the the averages as you have seen with our coronavirus coverage. A simple re-balancing could be just adding a NASDAQ-100 (QQQ) weighting to your portfolio with that ETF up about 46%! Or by adding smaller cap stocks through the IWM or in biotech the XBI as we recommended throughout the year you would have improved your portfolio performance. Next year the market may require more attention to sector rotation but we are assuming that biotech and healthcare stocks will be favored.
If you check the charts in the ETFS below you can appreciate how a healthcare portfolio can be weighted with biotech and small caps both of which took off in the November rally that favored small caps.
The XLV was more defensive up only 5% from 10/25 whereas the IWM and XBI were up over 30%.It was a lot easier picking ETFs than picking big stock winners.
Important trends developed in biotech as seen with M&A like rare diseases, vaccines and gene therapy.
Three Healthcare and Life Science Mutual Funds that Offer Strong Performance Over Ten Years
Fidelity Select Medical Technology and Device Portfolio (FSMEX)
Annual Performance 10 year 19.3%, 5 year 20.7%, One year 29.8%.
Top Five Stocks: TMO, DHR, BDX, BSX, ISRG.
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T.Rowe Price Health Sciences Fund (PRHSX)
Annual Performance 10 year 20.8%, 5 year 13.8%, One year 27.9%.
Top Five Stocks: UNH, TMO, ISRG, VRTX, MRK.
Fidelity Select Biotechnology Portfolio (FBIOX)
Annual Performance 10 Year 19.195,, 5 Year. 7.48% ,One year 34.75.
Top Five Stocks: ABBV, AMGN, VRTX, REGN, GILD.
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Healthcare Portfolio from 10/25
We developed this portfolio on October 25 as a core biotech and healthcare portfolio that could get you through a volatile macro period yet provide growth plus value. We will summarize performance at year end.
| PORTFOLIO | |||||||||
| Stock/ETF | Ticker | Price | Weight | P 11/13 | P 11/27 | %Perf | P/Dec 18 | % Perf | |
| 10/25 | 1 mo. | Month | |||||||
| iShares NAZ Bio | IBB | 136 | 25 | 141.06 | 143.22 | 2.27 | 155.75 | 12.79 | |
| iShares Russell 2k | IWM | 163 | 10 | 173.51 | 184.37 | 16.56 | 195.34 | 29.72 | |
| Merck | MRK | 80 | 10 | 81.09 | 79.86 | 2.4 | 79.53 | 1.9 | |
| United Health | UNH | 330 | 25 | 355.67 | 337.94 | 5.44 | 338.38 | 14.23 | |
| SPDR S&P Bio | XBI | 117 | 5 | 125.04 | 131.46 | 11.95 | 147.55 | 30.73 | |
| Healthcare SPDR | XLV | 108 | 25 | 112.12 | 109.44 | 3.35 | 113 | 4.71 | |