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Strategies & Market Trends : Dividend investing for retirement

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To: Ditchdigger who wrote (26766)	3/5/2017 1:10:48 PM
From: E_K_S	Read Replies (1) of 34328

Health Care I have reduced my Tekla Healthcare Opportunities Fund (THQ) by 75% but still hold many of my drug companies; MRK, PFE, BNY and even Domtar Corporation (UFS) they started a health care paper product division (think adult diapers) w/ 30% of their revenues from this new division. The big unknown is how the Obamacare gets replaced and the types and amounts of subsidies provided. Remember this is just a big tax that is spread across the Federal budget and if those dollars are spent efficiently (and/or reduced) will there be a net benefit from the previous plan). I heard that the latest proposal would offer some type of tax credit health insurance voucher that would range from $2K-$4K per individual down from the current average of $6K now provided as a subside. There is/was a move to cap/limit prescription drug expenses so it is unknown how that may impact the drug/pharma companies (reduce margins/costs and/or revenues). It's a huge expense to our economy as a percentage of our GDP so changes need to be made carefully and somehow spread out over years (not months). I like the Medical REITs including MPW and OHI as they yield over 7% and both have a greater than 40% cushion coverage based on next year's FFO. Therefore dividends are safe and may/could grow. Also, these REITs provide regional services (as owners of the buildings) so they impact the individual (especially the SNR assisted services) which may/could be the squeaky wheel if cuts have to be done (vs Pharma holding and/or reducing their prices). I am not sure how XLV captures the medical REITs in their index and if it is even reflected in the trend. My plan is to put new money into the medical REITs rather than THQ and/or my Pharma stocks. On any big sell off, I may consider THQ (below $15.00/share as it tracks the larger Pharma dividend payers. Whatever the case, this is going to be a growth area w/ more of the baby boomers aging and any dividend portfolio needs to have exposure. The positive is if we can structure a cost effective health care program/legislation (allowing more flexibility by the States) any future changes/adjustments will not shock out economy. EKS

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