Best Healthcare Stocks to Buy for 2021

Laveta Brigham

I’m going to recommend healthcare stocks for your portfolio in 2021, but first let’s check the sector’s vitals. Using the exchange-traded fund Health Care Sector Select SPDR  (XLV) – Get Report as a proxy, healthcare as a sector is up 11.3% so far in 2020.  How good is that? I’ll tell […]

I’m going to recommend healthcare stocks for your portfolio in 2021, but first let’s check the sector’s vitals.

Using the exchange-traded fund Health Care Sector Select SPDR  (XLV) – Get Report as a proxy, healthcare as a sector is up 11.3% so far in 2020. 

How good is that? I’ll tell you, but I’m going to avoid using colorful adjectives that we may have used to describe the past year (hey, this is intended to be a professional investing news service, right?).

So, let me say that in a normal year, if there were such a thing, 11.3% is not too shabby. Not at all. 

But in 2020? Eleven-plus percent lands the healthcare sector in fifth place out of eleven, according to Standard & Poor’s. The sector seriously outperformed the Dow Industrials, which were up 5.8%, but seriously underperformed the Nasdaq Composite index, which is up a whopping 42.1%. It also slid in just behind the S&P 500 itself, which is up 14.6%. 

As with all sectors, this one is made up of a number of industries, and it gets sloppy. (For comparison, I recently wrote about industrials picks for 2021, so if you want complicated, there you have it.)

Healthcare includes medical supply and medical equipment companies, biotechs, pharmaceutical firms and providers. You can see tremendous differences in performance among all of those types of business. But there is also a good bit of crossover for some companies among industries, leaving an investor unable to place a number of stocks into neat little boxes.

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