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Why Are Health Care Companies Good Investments Today?
As the bull market continues to age, many investors are re-balancing their investment portfolios. Some are buying bonds as a way to invest without losing any money. These folks are willing to accept safety in return for giving up the opportunity for more profits if the market keeps going up. Others are staying in the market but looking for safe investment niches. One such relatively safe investment niche is health care. Why are health care companies good investments today?
Signs That a Correction Is Getting Closer
Stock traders watch the market for technical signals and long term investors look at stock fundamentals. But, sometimes the proof is right in front of us in our everyday lives.
An old friend of mine, a native of the country of Panama, tells a story. His father was a farmer and an observer of nature as well as human nature. He said that a person did not have to read the business pages to know if there was a recession on the way. All that was necessary was to look at the mango trees in the park across from the church on a Sunday morning.
When times are good, no one bothers to climb the trees in the park to pick the mango fruit. But, when there is less work and less money in everyone’s pockets, the mango trees are picked bare because people need to eat.
You do not have to live in Panama and look at mango trees. When another mall closes in your town it is not necessarily because of bad management. People are simply buying less. And, the result is that weaker businesses fail, followed by the next weaker, and their employees start looking for work, and taking jobs that pay less.