Ask a group of economists to forecast the U.S. economy in 2023… and you’ll receive a different answer from nearly every respondent.
It’s like doing a “man on the street” interview and asking respondents to name the eighth president of the United States.
Half of the people will probably say “Abraham Lincoln,” and the other half will likely tell you it was “Abe Simpson.”
Only a few people would know that it was Martin Van Buren.
Once you realize how wrong the average economist forecast is… take a step back and marvel that 50% of economists are even worse than them at predicting the future.
The current consensus calls for a short, shallow recession that will flush most excess capital out of the system. Take that with a nice helping of salt.
But regardless of what happens, there’s one spot I’m investing in for the long term.
It’s a sector with some of the most dynamic trends of your life… And today — in a continued letter to my daughter on her fifth birthday week — I’ll name my top stock in that space.
There Is Money in Numbers
We’re all getting older. And that’s worth a lot of money.
Ready for some stats?
Today in China, there are 165 million people over the age of 65.
In India, that number is roughly 85 million.
In the U.S., we’re about to hit 53 million.
Think about it this way… About 16% of the world’s population will be over 65 by 2050. That’s nearly double where we were just five years ago. We’re talking about 1.5 billion people.
Now, I know plenty of people who are never going to retire. They’ll work, and work, and work… And with this, the amount of money to fight diseases and aging will rise and rise.
By 2027, we’ll likely see 20% of all U.S. spending on healthcare. That’s according to estimates from the Department of Health and Human Services.
My focus today is on chronic conditions. I’m 41 and I have two of them. I’ve got psoriatic arthritis and three disc problems in my back. I’m one person — and it costs a lot of money to keep me upright.
I’m expecting at least 60% of baby boomers to manage the same load of chronic conditions by 2030. And so, too, is the Office of Disease Prevention and Health Promotion.
You know what that means? A lot of money is about to go into medicine.
So here’s the medical health care stock I’m buying for my child…
Amelia’s Long-Term Portfolio: Stock No. 3 — AbbVie
Let’s start with the obvious: AbbVie Inc. (NYSE: ABBV) specializes in high-margin drugs, and it’s developing a new pipeline of products. The stock has blown away the S&P 500 over the past five years… and I expect the trend will continue.
Even if I need to be patient, I’ll still take stock in one of the world’s most critical drugmakers that pays a dividend yield of 3.6%. Given that I expect the Federal Reserve will aggressively slash rates at the end of 2023 and start of 2024, I think this is a great transition period for the stock.
It has developed two relatively new drugs — named Skyrizi and Rinvoq — that are treatments for arthritis and other autoimmune diseases.
Sales of both drugs exploded during the first quarter of 2022.
Skyrizi sales increased by 89% year over year in 2021, while Rinvoq saw gains well over 100% in the same year.
So, why am I sending my child this stock?
The rule of profitable biotech companies… Ready for a statistic that will knock your socks off?
According to my data on 123Portfolio, biotech stocks that have been rising four months in a row have beaten the market by 2-to-1 for more than 20 years.
I want to trade them during positive momentum, but if they’re rising for four months… I’ll buy them. If they fail just once, I’ll sell them. That’s it. I’ll ride the trend.
To your wealth,
Garrett
