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The need for healthcare is inevitable. Every person needs it at some point or the other. And when we are talking about something that everyone needs, there is, undoubtedly, a huge scope for investors as well.
As one of the largest sectors of the Indian economy, healthcare has a huge market already and it is still growing rapidly. This sector has seen a growth of 22% annually since 2016 and the industry is set to become worth USD 372 Million by 2022. Experts believe that the healthcare sector is a great industry for investment.
Why is it a good idea to invest in Healthcare?
The first and foremost point here is that the healthcare sector is unlike other sectors as it does not depend on any particular season. While other sectors might see a surge in business in a particular season, the demand for healthcare is pretty much constant throughout the year. This ensures that the investors can get relatively stable returns at any point.
The healthcare industry comprises hospitals, telemedicine, health insurance, medical devices, equipment, medicines and drugs, and much more. And with the country’s aging population, lifestyle-induced diseases, and epidemics like Covid-19, the requirement for even more specialized healthcare services has increased.
Basically, there are different industries/ markets within healthcare where you can think of investing. Some of these include domestic and export markets for branded and unbranded generic medicines, active pharmaceutical ingredient (API) manufacturing etc. Moreover, there are several companies that sell drug stocks, medical device stocks, healthcare provider stocks, and more. This gives the investor a wide range of options to choose from.
This should give you an idea of the immense scope involved from an investment point of view in the healthcare industry. Investment in such an industry is always lucrative as you are investing in something that is always growing.
Risks involved with an investment in healthcare
No investment ever comes without any risk and the case is no different with the healthcare industry either.
- It is a complex industry
The healthcare industry is quite complex, especially considering all of the components that it comprises. So, while investing, if you aren’t aware of what a company does or how it operates then you need to think twice before making an investment.
Also, with so many stocks and companies offering stocks available, deciding where to invest can get even more complex. Hence, in-depth knowledge of how it all works is important before making an investment.
- Government Legislation and Regulatory Caps
These are the other two factors to consider before investing in healthcare. Sweeping changes in policies can bring significant changes into the sector as well. Also, there could be unforeseen regulatory changes that could derail your investments.
The prices of essential medicines and medical devices can be capped at any time which could have a direct impact on healthcare.
So, if you wish to invest in healthcare then it is important that you keep an eye out on the regulatory changes and shifts in policies.
No matter what the type of investment is, it certainly needs meticulous planning. Where your hard-earned money is involved, thinking twice is important.
Considering the immense scope and options that are involved, it is safe to say that healthcare is a great industry to invest in. Moreover, considering that its returns are great and its market is stable throughout the year, investors should definitely consider healthcare for their future investments.
Having said that, it is also important to note that no investment ever comes without risk. So, even with healthcare investments, it is important to first assess, plan, and then make a decision.