Financial Professionals


Investing around Obama's Speech on Healthcare


Call me cynical, but the math for healthcare reform just doesn't add up. The plan covers more people, reduces the current cost for existing policy holders, and will not increase the deficit - sounds rather magical.

Yesterday, however, the market didn't seem too concerned about the impending speech; let's see what happens in the next few days. If my analysis is correct, the market is anticipating a "Healthcare Lite" bill to pass.

If there was anything that struck me about last night's speech, it was President Obama's claim that he will be the last President to take up the healthcare issue. With that "legacy" theme, I expect something will get passed, but a lesser version of what is being bandied about now. A lesser version is the best possible scenario for the markets. Let's say the plan costs half the expected $900 billion current price tag and covers less than half the 46 million Americans who are currently uninsured. What is "market positive" is that the healthcare sector holdings are currently a heavy "underweight," expecting a much grander bill. From managed care to pharma to biotech, a "lesser version" will add another leg of foundation to the recovering market.

Past performance is not a guarantee of future results.

Virtus Investment Partners provides this communication as a matter of general information. The opinions stated herein are those of the author and not necessarily the opinions of Virtus, its affiliates or its subadvisers. Portfolio managers at Virtus make investment decisions in accordance with specific client guidelines and restrictions. As a result, client accounts may differ in strategy and composition from the information presented herein. Any facts and statistics quoted are from sources believed to be reliable, but they may be incomplete or condensed and we do not guarantee their accuracy. This communication is not an offer or solicitation to purchase or sell any security, and it is not a research report. Individuals should consult with a qualified financial professional before making any investment decisions.