Just How Safe is Health Insurance
The Health sector is typically viewed as safe spot for investing. Within the sector, insurance often seems even safer, less susceptible to the vicissitudes of new drug discovery or changing technologies in medical devices. Perhaps not on the radar for risk, is the sheer and rapidly growing size of the mega health insurers, and their susceptibility to regulatory risk.
Amazingly, the revenues for the big 5 insurers in the chart above are now comparable to the 5 preeminent technology companies: Facebook, Amazon, apple, Google, and Netflix. Major college endowments showed a prescient approach to regulatory risk by moving their operations offshore, years ago. Investors may wish to exercise similar caution in the large health insurers.
Signals from the Global Bond Market
Yields on 10 year Treasury securities are not far from 2.50%, again. The real surprise might be the global supply of bonds that are now retracing their path to negative yields. Global markets appear to find these low yields supportive of stocks, not a harbinger of dangerously low growth rates.
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