Making Money as Baby-Boomer Generation Retires
America's 78 million baby boomers are richer than any group in history; the group controls 50% of all U.S. discretionary income and accounts for 75% of drug spending. As an investor you cannot afford to ignore this demographic in the coming years and where they will be spending their retirement money.
As more boomers approach retirement, forecasters expect a huge bump up in certain kinds of expenditures. Two that should see the biggest jump are Health care and Travel/Leisure stocks
National health-care spending is estimated to increase as a percentage of GDP by 22 percent over the next 10 years. For that the health-care industry can thank the boomers, who are just beginning to enter the time of their lives when drug, hospital and other expenditures rise dramatically. In fact, it is estimated that people 50 and older will account for more than half of all health-care spending.
Picking winning companies here isn't as easy as it might appear. With power in numbers, the boomers could put pressure on prices, making new medical developments less profitable for some companies.
However, there are several healthcare and Leisure stocks we think OTCPicks members should add to their radar as shown below:
List of Healthcare Stocks to watch for:
Celgene Corp . (NASDAQ:CELG) -- Celgene is a multinational biopharmaceutical company focusing on the discovery, the development, and the commercialization of products for the treatment of cancer and other severe, immune, inflammatory conditions.
Detailed Quote: http://www.otcpicks.com/quotes/CELG.php
Varien Medical Systems Inc. (NYSE:VAR) -- Varian Medical Systems is the world's leading manufacturer of medical devices and software for treating cancer and other medical conditions with radiotherapy, radiosurgery, proton therapy, and brachytherapy
Detailed Quote: http://www.otcpicks.com/quotes/VAR.php
Teva Pharmaceuticals (NYSE:TEVA) --Teva Pharmaceutical Industries Ltd. is a global pharmaceutical company specializing in the development, production and marketing of generic and proprietary branded pharmaceuticals as well as active pharmaceutical ingredients
Detailed Quote: http://www.otcpicks.com/quotes/TEVA.php
Allergan Inc. (NYSE:AGN) -- Allergan, Inc., a multi-specialty healthcare company, discovers, develops, and commercializes specialty pharmaceutical, medical device, and over-the-counter products for the ophthalmic, neurological, medical aesthetics, medical dermatological, breast aesthetics, obesity intervention, urological, and other specialty markets
Detailed Quote: http://www.otcpicks.com/quotes/AGN.php
UnitedHealth Group Inc. (NYSE:UNH) --UnitedHealth Group Incorporated provides healthcare services in the United States
Detailed Quote: http://www.otcpicks.com/quotes/UNH.php
Walgreen Comp. (WAG) --Walgreen Co. operates a chain of drugstores in the United States. These drugstores sell prescription and non-prescription drugs, and general merchandise.
Detailed Quote: http://www.otcpicks.com/quotes/WAG.php
Stericycle (NASDAQ:SRCL) --It offers institutional regulated waste management services, Bio Systems sharps management services to reduce the risk of needle sticks, various products and services for infection control, and regulated returns management services for expired or recalled healthcare products
Detailed Quote: http://www.otcpicks.com/quotes/SRCL.php
Hartford Financial Services Group (NYSE:HIG) --The Hartford Financial Services Group, Inc., through its subsidiaries, provides insurance and financial services in the United States and internationally
Detailed Quote: http://www.otcpicks.com/quotes/HIG.php
Amgen (NASDAQ:AMGN) -- The company has a dominant position in the cancer marketplace thanks to two drugs that alleviate side effects caused by other therapies, including chemotherapy.
Detailed Quote: http://www.otcpicks.com/quotes/AMGN.php
Travel and Leisure Stocks to watch for:
So where do forecasters see baby-boomers heading for fun in their Golden years? Casinos, Hotels and Cruises top the list. Not only that, but it was recently reported that travelers ages 55 to 64 spend 40 percent more on average than other age groups.
Some of the most attractive companies in the travel and leisure space include:
Penn National Gaming (NASDAQ:PENN) -- Penn National Gaming, Inc. and subsidiaries engage in the ownership and operation of gaming and pari-mutuel properties in the United States
Detailed Quote: http://www.otcpicks.com/quotes/PENN.php
Wyndham Worldwide Corp. (NYSE:WYN) --- Wyndam Worldwide Corp. includes hotels, vacation ownership, and vacation rental and exchange.
Detailed Quote: http://www.otcpicks.com/quotes/WYN.php
Starwood Hotels & Resorts (HOT) -- company primarily operates luxury and upscale full service hotels, retreats, and residences.
Detailed Quote: http://www.otcpicks.com/quotes/HOT.php
Carnival Corp. (NYSE:CCL)--Carnival Corporation operates as a cruise and vacation company. It also markets and operates hotels or lodges in Alaska and the Yukon Territory of Canada.
Detailed Quote: http://www.otcpicks.com/quotes/CCL.php
Royal Caribbean Cruises Ltd. (NYSE:RCL) --Royal Caribbean Cruises Ltd. operates in cruise vacation industry in North America and internationally.
Detailed Quote: http://www.otcpicks.com/quotes/RCL.php
Finally, many members that are concerned that a baby-boomer sell-off would hurt the stock market overall should understand that that Baby Boomers' direct holdings in U.S. equities are a fairly small chunk of all shares outstanding. In fact, about 50 percent of all equities are held by institutional investors, including mutual funds, pension funds, insurance companies and other financial institutions. These funds have a very long time horizon. Even if they're paying out pension benefits to Boomers, those payments are based on long-term projections of investment returns. So it's not likely those portfolios will be dumping stock just because Boomers are retiring.
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