The Sector to Buy Now

Marc Lichtenfeld By Marc Lichtenfeld
Chief Income Strategist, The Oxford Club

Market Trends

I have been a big fan of the biotech sector for years.

The demographics mean there will be huge demand for biotech’s medicines for decades. Every day, 10,000 people turn 65 in the United States. And one thing we know is that the older we get, the more healthcare we consume.

That demand has translated into stock gains. Over the last 10 years, the biotech sector outperformed the broad market by nearly 300%.

And I expect that to continue.

Every January, I go to San Francisco for the J.P. Morgan Healthcare Conference and the Biotech Showcase. The J.P. Morgan conference is without a doubt the most important healthcare investing conference of the year.

Tens of thousands of people descend upon San Francisco’s Union Square for other conferences (such as the Biotech Showcase), for meetings and just to be near the action.

A crappy hotel room – and I do mean crappy – in Union Square now goes for $600 a night. A decent room costs $900. That’s because every institutional investor in healthcare, analyst, banker, healthcare executive, and consultant is in town for the conferences and meetings.

The J.P. Morgan conference is maxed out every year at about 8,000 people, but the Biotech Showcase is already reporting a 60% increase in attendance for 2018.

I’m in the early stages of setting up my one-on-one meetings with CEOs. My first meeting the Monday the conference starts is with an Israeli biotech company that has two cancer drugs in development. It’s a company I’m familiar with, and I’m eager to hear the latest update.

I’ll also be meeting with a fund manager who serves on several boards of directors and always has great insights into the sector.

I come back from the conference with lots of new ideas to investigate. Though it’s an exhausting four days, I’m always energized to start my research.

Long term, I expect healthcare and particularly biotech to be very strong performers for investors.

But it’s not just the long term. Right now is a great time to get involved in the sector – before the conference.

Companies often make big announcements at the conference that can spike the prices of their stocks.

So you want to get in before the news breaks.

Typically, the biotech sector more than doubles the performance of the broad market this time of year as investors position themselves ahead of the conference.

If you’ve read Wealthy Retirement for even just a little while, you know that I recommend investing for the long term.

But there’s nothing wrong with buying stocks before they lift off, even if you plan on holding them for years.

If you’re going to add any biotech, pharma or other healthcare stocks to your portfolio, consider doing it now before they go much higher.

I’ll report back to you on what I learned at the conference and whom I spoke to next month.

Good investing,

Marc

P.S. Something big is happening in biotech… In fact, the MIT Technology Review is calling it “the biggest biotech discovery of the past century.” That’s because this single technology could eliminate 4,800 incurable diseases. Revenue could soar 303,316% starting February 1. For all the details, click here.