What are health care stocks?

Broadly speaking, health care stocks are shares of publicly-traded companies that provide products and services that keep us healthy. They can be broken down into a few different industries: When most people hear the term “health care,” the first thing that comes to mind is often a hospital.

Are healthcare stocks a defensive stock?

It also includes pharmacy benefits managers (PBMs). Medical services provider stocks. This subgroup includes hospital operators, home health companies, managed care facility operators and other companies that provide healthcare services. As defensive stocks, healthcare companies provide steady returns in any market.

Should you invest in health stocks?

Investing in healthcare is enticing. After all, everyone needs medical care at some point in their lives. Everyone uses health services of some kind. If you go by the adage "invest in what you know," then health stocks, which range from drug to insurance companies, certainly qualify. They qualify for economic reasons too.

Can you buy healthcare stocks if you have a 401(k)?

Retirement investors can buy healthcare stocks in tax-advantaged retirement plans, like individual retirement accounts ( IRAs ). But if you have a 401 (k), you’ll likely instead have to look into mutual funds that focus on the healthcare industry, rather than individual stocks.