In 2023 if you owned big tech or some or all of the magnificent 7 companies the assets under administration in your portfolio went up. In 2024, big tech is likely to go up again, but will it go up at the same percentage levels? no one knows, which means there might be other sectors that could go up or which sectors offer value?

In an article from Reuters, one area that underperformed in 2023 was healthcare. In the S&P 500 index healthcare has about 13%.

Why might the index go up? The exciting news of the weight loss drugs from Novo Nordisk and Eli Lilly. If the drugs work well as hoped people will be healthier and there may be fewer obese patients. The amazing surgeries doctors can do to treat people will make an even better difference.

Health care was trading at the middle of January at 17.9 times earnings versus the index of 19.7 times or a discount of 9%. Historically the difference is a 4% premium according to data from LSEG Datastream. If things are normal, at least a 10% rise is possible.

Will the rally that boosted tech and growth stocks broaden to include more sectors including healthcare?

Healthcare stocks tend to struggle in an election year, because politicians started pointing to health care as a big expense, they say they will lower the costs. However, this year some investors believe there is less risk because no one is proposing big policy items and no party is expecting big gains in Congress, diminishing the chances of any legislation to overhaul the industry.

Healthcare deals in big data, will AI help to lower costs and help make better companies?

Linking to dividend paying stocks, during election years some sectors are painted with a broad brush because politicians have to appeal to a broad number of people to win and often health care and insurance is added because we all need them, they all tend to raise prices. However, since we all need them, it makes the companies profitable to pay dividends and that you can enjoy. One method to investing is examine the companies you pay bills to see if they are worth investing in. If yes, as long as you are a purchaser, you can keep your eye on the company to ensure they give value.

There are more questions than answers, till the next time – to raising questions.