The Markets Go Mad For Obamacare! Really?

Retirement, Income, Tax & Estate Planning.

The Markets Go Mad For Obamacare! Really?

March 14, 2014 Government Health Care Long Term Care Medicare Newsletter Retirement Planning Uncategorized 0

The older we get, the more set in our ways we become and the more we hate change.  Because of that I really don’t ask people to change their ways.  Instead I ask them to make new decisions based on new information.  Wondering how that works out for me?  I guess it depends on the day.

Probably one of the biggest changes in the good ole US of A is the change taking place in health care.  While the headlines are all about the Affordable Care Act (ACA), aka Obamacare, changes are happening in the Medicare world also and many of you may be affected in the future.

As for the ACA, many more folks seem to be negative on the law than feel it’s a good thing.  So the question is whether the act will be repealed in 2017 should we have a Republican president and both houses controlled by the “R’s”.  Until then, the “house” may continue taking votes to repeal Obamacare, and if Republicans take control of the Senate next year, the upper chamber may try also.  But should a repeal bill land on the president’s desk, you can bet Obama will veto it. 

So we know that the majority of American’s still haven’t fallen in love with the ACA, and we know that there are many fixes that will be made in the coming years to shore up all the weaknesses in the law.  But how does Wall Street fell about the ACA now?  More specifically, do they sense it’s here to stay or will be repealed?

BusinessWeek magazine ran a column a few weeks back (click here to read full article) called “The Markets Go Mad For Obamacare.  According to the article, a new online broker called Motif Investing is offering two funds that allow folks to pick a position on the law.  One fund is the Obamacare Stock Fund and the other is the Repeal Obamacare Stock Fund. 

Both funds began on February 18, 2013.  Guess which fund is doing best?  The Obamacare fund is up 22.8% while the Repeal Obamacare fund is up only 13.8%.

The Obamacare fund is comprised of hospitals, generic drug makers, pharmacy-benefit managers, and companies specializing in electronic medical records.  Wall Street figures these firms will benefit from the ACA.

The Repeal Obamacare fund is composed of medical device manufacturers, assisted care and home health care providers, medical diagnostic equipment and services providers. 

Even more interesting is the amount of money invested in each fund so far.  Guess where most of the money is going?  Yeap…Obamacare.  In fact, for every dollar invested in the Repeal Obamacare fund, 45 dollars have been invested in the Obamacare fund.  Go figure?

Peter Signature

Your Retirement Quarterback®

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