healthcare centered economy

What should we expect with the economy this year? Well, we'll have growth at about 2% with  a healing housing market, reinforced consumer spending and a slowly improving job market.

What's this mean to investors? The stage should be set for good investor results with a continuation of modest growth. Despite modest economic expansion in 2012, earnings for companies in the S&P 500 grew by almost 5%. Companies in 2013 will continue to concentrate on profits rather than expansion.

Despite greater volatility, earnings and stock prices have steadily grown over time. Since 1954 earnings increased at an average annual rate of 6.3%. Stocks were up 6.9% per year for a total average return of 10.5% annually with dividends reinvested.

There are three items to watch. The GDP, S&P 500 Index, and S&P 500 Earnings. The stock market is not back at its October 2007 levels. Look at current earnings.

Expect a 10% correction in the stock market. There will be no relief from low interest rates.

The IMF projects global growth to be 3.6% in 2013.

One sector to look at is healthcare stocks. Key points to consider are a 30 million increase in number of insured. People the age of 65 is increasing. Healthcare spending is increasing. A new innovation is personalized medicine. The healthcare sector has outperformed the S&P over the last 5 years.

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