President Obama's agenda the next four years could be a boon
or a bust for some stock sectors. Here's an overview of what
investing strategists say are the best sectors to buy and steer
Among myriad changes, the sweeping ObamaCare plan enables more
than 30 million uninsured Americans to receive health
This brings an onslaught of new customers to hospitals, health
insurers and drugmakers, but the added rules make it difficult to
determine how profitable they'll be.
For example, health insurance plans have to provide
preventative services without copays, do away with annual and
lifetime coverage limits and cover new patients with pre-existing
Automatic federal spending cuts slated for next year would
trim Medicare payments to hospitals by more than $5.8 billion and
drug benefits by $591 million.
The winners and losers will vary depending on whom you ask,
and there are just too many issues that still need to be worked
out, said Robert Laura, president of Synergos Financial Group
with $25 million in assets under management in Brighton,
He believes investors' best bets lie with firms akin to those
who sold picks and shovels during the gold rush. Those
), the medical-waste disposal king, andMcKesson (
), a tech firm serving all aspects of the health care
Real estate investment trusts specializing in health care
facilities or hospitals will also benefit from increased health
John Graves, editor of "The Retirement Journal"
recommendsHealth Care REIT (
),Medical Properties Trust (
) andSabra Health Care REIT (SBRA).
While plenty of health care
and REIT ETFs exist, none invest only in health care REITs,
health care technology or medical waste.
Biggest 2nd-Term Losers
Aerospace and defense:
Federal budget cuts set to go into effect January amount to $109
billion through Sept. 30, 2013, and $984 billion over nine
Navy aircraft spending is slated to be reduced by $2.2
billion, or 9.4%, and Army operations $6.9 billion, or 9.4%.
That will have an impact on the bottom lines ofBoeing (BA) and
Lockheed Martin (LMT), which make military aircraft and missiles,
said Jonathan Hill. As an investment strategist at Gibraltar
Private Bank & Trust in Coral Gables, Fla., he manages more
than $600 million in client assets.
Both stocks are major holdings iniShares Dow Jones U.S.
Aerospace & Defense (ITA) andPowerShares Aerospace &
Most of the blue chip defense and aerospace contractors pay a
dividend that could be cut should profit and sales decline, said
Robert Luna. He's CEO and chief investment officer at SureVest
Capital Management in Phoenix, Ariz., with $100 million in assets
"I don't think the worst-case scenario has been priced into
them yet," Luna said.
The coal industry, which accounts for 42% for the country's
electricity, had already been suffering from having to compete
with free-falling natural gas prices the past four years.
Some older coal plants have been forced to close because of
expensive upgrades required by toxic emissions regulations that
were already on the way before Obama took office.
Coal producers are bracing for harsher emissions rules in
Obama's second term.
Market Vectors Coal ETF (KOL) plunged 5.5% the day after the
It's lost 27.13% year to date, much steeper than the 4.86%
loss for energy stocks tracked by Morningstar Inc.
J. Camarda, chairman and chief investment officer of Camarda
Wealth Advisory Group in Fleming Island, Fla., expects KOL to
fall to new lows. Camarda has $250 million in assets under