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The Health Share Managed Account divides the broad health care industry into four categories, in order to customize our investment weightings so that our diversified and specific investment goals are met. Each of these four categories comprise a custom tailored asset allocation of 25%. These four allocated sections include: Broad Healthcare, Pharmaceuticals, Biotechnology and Health Care Income. These four health care categories fit our particular investment needs, or goals, as they complement each other and are used to increase our exposure to certain sub industries within the health care sector that may be outperforming other sectors in the portfolio. Although an individual sub sector such as Biotechnology, may bear a higher level of risk than a broad health care sector because of less diversity, these sector investments may also offer opportunities for returns greater than investments in the other categories or in the entire Health Care Index
The Health Care Sector can offer some enormous opportunities in bull markets. It is also a very good defensive sector during bear markets and has in the past, been a recession-proof industry. For example, the S&P 500 slid more than 50% in the down market between 2000 and 2002. The NASDAQ fared even worse, plunging 78%. By contrast, the S&P Healthcare Select SPDR (AMEX: XLV) only lost 33%. In fact, some of the XLV holdings
actually performed very impressively during the last Bear Market. Johnson &
Johnson (NYSE: JNJ) soared 73%, while Abbott Labs (NYSE: ABT) jumped 48%.
Since the bear market bottomed out in 2002, the Amex Pharmaceuticals Index
($DRG) has risen 46%, the S&P Healthcare SPDR is up 76%, and the Amex
Biotechnology Index has rocketed 194%. Diversification and precise exposure to US companies
in the health care equipment and supply, health care provider and services,
biotechnology and pharmaceutical industries Potential for takeovers and mergers among various
companies in the industry. Original pro active cycle analysis research for signaling buy and sell entry and exit points. A short 25 years ago, healthcare was only 6% of the nation's gross domestic product (GDP). Today, U.S. healthcare is a $2 trillion industry, representing 17% of GDP: the highest proportion ever. The nation's healthcare bill has grown substantially, almost three times the overall national inflation rate, increasing by 7.9 percent in 2004, the most recent year with near-final numbers. The overall cost of health care -- everything from hospital and doctor bills to the cost of pharmaceuticals, medical equipment, insurance and nursing home and home-health care -- doubled over the last few years. The single greatest economic challenge facing our country may be the exploding cost of healthcare. Healthcare expenditures have soared over the past ten years. The full impact of escalating costs has only recently made its way into national consciousness. Individual awareness of healthcare costs has been limited because insurance companies often cover the bulk of costs before patients ever see a bill. Now, people are beginning to take notice of rising health costs as their coverage is reduced or even eliminated. Add to that the impact of the aging "baby boom" generation (82.8 million people born between 1946 and 1964) who have begun turning 60 recently and has the makings of a genuine crisis, with essential services becoming unaffordable for millions of individuals. Over the last six years, the National Institutes of Health have provided more than $140 billion in grant funding, accelerating the creation of new products and devices. These developments have the potential not only to alleviate the healthcare crisis, but also to drive therapeutic benefits to new heights as well as prompting numerous and potentially revolutionary innovations in the biotechnology and pharmaceutical industries. The mapping of the human genome in 2000 launched serious investigation into new ways to identify disease in its earliest stages and eradicate it before it develops. This represents a paradigm shift from treatment and management to one of prevention and cure, which holds great promise for society and investors. National spending for health is projected to grow from approximately $2 trillion a few years ago to more than $3 trillion in 2012. An expanding aging population, which uses more health care products and services, fuels this rising demand. Rapid advances in science and technology are expected to create some exciting investment possibilities. People always get sick and more than ever in history, medicine is helping to overcome illness and improve the quality of human life. The American obsession with longevity and fitness and the increasing ability of modern medicine to ease our afflictions and prolong life are driving unprecedented growth in the health care industry. Those trends can open the opportunity for healthy growth in a diversified Health Share Investment Account. The demand for health care is ubiquitous. At some point, every person will use the industry's products and services. In much the same way that automobiles, airplanes, television, and computers changed everyday life in the 20th century, health care may alter the way we live today.
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