Wayne Gretzky hung up his hockey sticks a long time ago. But something he said is still repeated often: “I skate where the record is going to be, not where it was.” Although Gretzky’s quote has become something of a cliché, it still remains highly relevant in many areas – including investments.
You have probably heard a lot about “unstoppable trends” that present excellent opportunities for profit. Some of them are even called megatrends due to their global impact. For investors, the idea is the same as Gretzky articulated years ago: focus on what will happen in the future.
Identifying and investing in the main trends is a great way to do this. It is what I do with my personal portfolio to a large extent. Here’s why I’m betting big on a megatrend, in particular.
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A megatrend, three compelling reasons
The megatrend I’m most excited about is using technology to solve some of our most significant health problems. There is no doubt that this is a trend that has a far-reaching impact. And it is indisputable that technology is already helping to address health challenges in a more intense way than ever.
Why am I investing heavily in this megatrend? I have three compelling reasons.
First, I agree 100% with the philosophy of Motley Fool co-founder David Gardner: “Make your portfolio reflect your best version of our future.” My best vision for the future is a world where people do not die of cancer and other diseases (especially when they are young), have convenient access to highly effective health services and can live a long and productive life.
Second, I have no doubt that the demand for health-oriented technology will increase significantly in the coming decades. Another important trend – the aging of the population – will be a key factor in driving this greater demand.
Third, my opinion is that we are on the verge of major technological innovations in various areas of health. Gene editing, genomic testing and artificial intelligence (just to name a few) remain in their early stages.
Many excellent actions
I have invested in shares in many of the most promising areas of technological innovation in health. One of my favorite health actions is Intuitive Surgical (NASDAQ: ISRG). The company was a pioneer in the use of robotic surgical systems for over 20 years. Today, there are nearly 6,000 Intuitive da Vinci systems in use worldwide.
Some say that we are in the “golden age of biotechnology”. I believe that. That is why I am a huge fan of biotechnology actions. I own stock Vertex Pharmaceuticals (NASDAQ: VRTX), which I would say is classified as one of the main biotechnology actions at the moment. Vertex claims a monopoly in the treatment of cystic fibrosis (CF). It is also making impressive progress in the treatment of other rare genetic diseases, as well as a not-so-rare disease with a potential cure for type 1 diabetes, which will advance to clinical trials this year.
Medicine Editas (NASDAQ: EDIT) it is another biotechnology action that I like and own. It is a leader in CRISPR gene editing. Editas’ programs still have a long way to go before they reach the market. However, I am cautiously optimistic about your chances of revolutionizing the treatment of various genetic diseases and cancer.
There are so many excellent biotechnology stocks to choose from, however, that I decided a few years ago to buy many of them at once with SPDR S&P Biotech ETF (NYSEMKT: XBI). This exchange-traded fund (ETF) currently holds positions in 170 biotechnology companies.
However, my focus goes beyond biotechnology and robotic surgery. I am a proud shareholder of Guardant Health (NASDAQ: GH), a leader in the development of liquid biopsies that can fundamentally change the way cancer is diagnosed. Guardant Health already markets liquid biopsy products that are used as a complementary diagnosis for cancer immunotherapies. Its great opportunity, however, is in the detection of cancer at an early stage and in the monitoring of recurrence.
I also believe that it is time for telehealth. That’s why I own Teladoc Health (NYSE: TDOC) stock. Teladoc is the leading provider of telehealth services. It is also at the forefront of chronic disease management, thanks to the acquisition of Livongo Health last year. (I was also a shareholder in Livongo before the acquisition, by the way.)
A big bet, but not a big bet
These are just some of the actions that I currently have and that are leading the way to bring technological innovations to health. In total, my portfolio includes 18 stocks and ETFs that are directly related to this megatrend.
I have a lot of money investing in many companies in the hope that the health landscape will change. However, I don’t consider this big bet to be a big bet. Perhaps not everyone will succeed, but many of them will. And if they are, my investment portfolio must have something else that reminds Wayne Gretzky: the growth of hockey stocks.