In the fourth quarter, health care stocks shook off some of their politically hobbled 2019 underperformance. Despite the sector’s off year, Chief Investment Officer Jim Lowell explained why we’ll continue to overweight health care stocks in our recent quarterly webinar*: 2020 Conflicts—Impeachment, Tariffs & Global Dysfunction.
Please enjoy the excerpt below and click here for the full webinar replay to hear more.
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Jim Lowell: Longstanding clients here at the firm know that we’ve been overweight health care, not just for a year or two, but for decades. And the reality is that the sector, which accounts for about 18% of our economy, continues to present both the necessary growth story—our aging demographic population’s demand for more and less invasive ways to treat all kinds of illnesses on a going-forward basis—as well as creating a global emerging market and emerging growth story as economies around the world begin to increase the number of consumers who are able to afford not just rudimentary but increasingly better modes of health care and pharmaceutical cures.
Jim Lowell: So we think that the health care sector for a long-term investor is effectively a no-brainer. That said, inside of any given year, especially inside of a politicized election year where drug prices are often used by both sides as a way to try to gain political favor, the market reaction can be fairly negative in the short term. I would expect that we’d see some volatility this year because it is an election year, but for long-term investors like us, if people are selling on headline fears, we’re able to buy a sector we believe in long-term at a discounted prices.
*Webinar recorded after the market closed on January 23, 2020.
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