Wayne Gretzky has long since hung up his hockey sticks. But something he said is still repeated often: “I skate to where the disc is going to be, not where it was.” Although Gretzky’s quote has become something of a cliché, it remains highly relevant in many areas – including investment.
You’re probably hearing a lot of ‘unstoppable trends’ that offer great opportunities to make a profit. Some of these are even called megatrends because of their global impact. For investors, the idea is the same concept that Gretzky articulated years ago: focus on what is going to happen in the future.
Identifying and investing in key trends is a great way to do that. This is what I do to a large extent with my personal portfolio. This is why I bet on one megatrend in particular.
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One mega trend, three compelling reasons
The mega trend I am most excited about is the use of technology to solve some of our most important healthcare issues. There is no doubt that this is a trend that has a far-reaching impact. And it’s undeniable that technology is already helping to address healthcare challenges in a bigger way than ever before.
Why do I invest so much in this megatrend? I have three compelling reasons.
First, I agree 100% with David Gardner, co-founder of Motley Fool,’s philosophy: “Let your portfolio reflect your best version of our future.” My best vision for the future is a world where people do not die from cancer and other diseases (especially not young), have easy access to highly effective healthcare services and can lead a long and productive life.
Secondly, I have no doubt that the demand for healthcare-focused technology will increase significantly over the next few decades. Another important trend – aging of the population – will be an important factor driving up greater demand.
Thirdly, my opinion is that we are on the threshold of major technological innovations in various health areas. Genetic engineering, genomic testing, and artificial intelligence (to name but a few) remain in their early stages.
Very good stocks
I have invested in the shares of many of the most promising areas of technological innovation in healthcare. One of my favorite health supplies is Intuitive surgical (NASDAQ: ISRG). The company pioneered the use of robotic surgical systems more than 20 years ago. Today, nearly 6,000 of Intuitive’s da Vinci systems are used worldwide.
Some say we are in the ‘golden age of biotechnology’. I believe it. That’s why I’m a big fan of biotechnology stocks. I own shares of Vertex Pharmaceutical Products (NASDAQ: VRTX), which in my opinion is now one of the best biotechnology stocks. Vertex claims a monopoly in the treatment of cystic fibrosis (CF). It is also making impressive progress in treating other rare genetic diseases, as well as a non-rare disease with a potential cure for type 1 diabetes advancing to clinical trials this year.
Editas Medisyne (NASDAQ: EDIT) is another biotechnological stock I like and own. It is a leader in CRISPR gene editing. Editas’ programs still have a long way to go before they can possibly reach the market. However, I am cautiously optimistic about the chances of making a revolution in the treatment of various genetic diseases and cancers.
However, there are so many amazing biotechnological stocks to choose from that I decided a few years ago to buy many of them at once with the SPDR S&P Biotech ETF (NYSEMKT: XBI). This exchange traded fund (ETF) currently holds positions in 170 biotechnologies.
However, my focus extends beyond biotechnology and robotic surgery. I am a proud shareholder of Guardant Health (NASDAQ: GH), a leader in the development of fluid biopsies that can fundamentally change the way cancer is diagnosed. Guardant Health markets all liquid biopsy products used as diagnostic drugs for cancer immunotherapy. The big opportunity, however, is to detect cancer and monitor recurrence.
I also believe that the time has come for television health. That’s why I own Teladoc Health (NYSE: TDOC) stock. Teladoc is the best provider of telecom health services. It is also at the forefront of chronic disease management thanks to the acquisition of Livongo Health last year. (By the way, I was also a shareholder in Livongo.)
A big bet, but not a big gamble
These are just a few of the stocks I currently own, which take the lead in bringing technological innovations into healthcare. In total, my portfolio contains 18 stocks and ETFs that are directly related to this megatrend.
I have a lot of money to spend on many companies in the hopes that they will change the healthcare landscape. However, I do not consider this big bet to be a big gamble at all. Maybe not everyone will be successful, but many will. And if so, my investment portfolio should remind me of something else about Wayne Gretzky: growth in hockey stocks.