Baxter International Splits Off Baxalta

If you know almost nothing about investing and are looking to get started with individual stocks, large healthcare stocks are fertile soil to begin your buy-and-hold research. During 1902 through 2012, only the tobacco sector outperformed the healthcare sector in America. Tobacco stocks returned 17% annually, and healthcare stocks returned 13% annually.

The reason why I encourage starting with healthcare rather than tobacco is that: (1) units of tobacco sales decline by 3.5% annually in the United States, forcing the tobacco giants to increase per share growth through stock buybacks, price hikes, and diversification into things like e-vapor cigarettes, and (2) the healthcare industry is growing at 4% annually and may even grow faster than that rate as America ages.

There are only two customary ways that you can run into trouble with a healthcare investment: (1) you can overpay, which is a risk that applies to every possible investment, … Read the rest of this article!