Health care is ‘prime’ for investment amid inflation: Portfolio manager

·3 min read

Markets have gotten off to a rocky start following hawkish Fed minutes signaling the possibility of rate hikes coming sooner than expected in an effort to curb surging inflation. According to Dakota Wealth Management senior portfolio manager Robert Pavlik, however, the health care sector may present opportunities for investment in light of the current inflationary environment.

“As far as health care is concerned, health care is a prime candidate for an inflationary environment,” Pavlik told Yahoo Finance Live. “And so I do believe that there are some opportunities in healthcare. Again, there are some very pricey stocks within the group. But I think you could look to sort of the blue chip companies and probably do quite well in a very choppy trading environment.”

Pavlik joined Yahoo Finance Live to discuss the market outlook for the year in relation to the Fed’s actions, the recent market response to the FOMC meeting minutes, and how to invest across sectors. Dakota Wealth Management is a Florida-based independent investment management firm serving high-net-worth individuals, families, and institutions.

With record 6.8% annual inflation still at the forefront of investors’ minds, Pavlik elaborated on his rationale for trading in light of the market concerns for 2022.

“Anyway, I think there's going to be a lot of emphasis and worry about inflation. And so I think there's going to be some choppiness,” he said. “And I think that's where you sort of focus on value and not get too far out over your skis. You don't want to be taking a lot of big risky bets in a very choppy trading environment.”

And with so many uncertainties across various industry sectors, some experts are convinced that positive change within the health-care space may be one constant to look forward to this year. For instance, a Deloitte report cited ongoing pandemic conditions as well as advancements in science, technology, and analytics as being catalysts for the “clinical, financial, and operational transformation” of the industry in 2022.

One part of this spurring of change includes the increased adoption of global health care digital experience platforms, a market that is expected to reach $2.3 billion by 2028 for a compound annual growth rate (CAGR) of 12.9% from 2021 to 2028. These platforms are ultimately designed to improve connectivity between health-care providers and patients while helping to cut costs across the industry.

Other industries to watch in 2022

As for other industries that may present winners this year, Pavlik has his sights set on the energy sector as the economy continues to reopen.

“Energy, I think, is going to continue to see demand,” he said. “I mean, if we take the recommendations of analysts and other Street analysts saying that the economy is going to continue to reopen as we move through the winter months and into the spring and summer, the demand for energy in gasoline and oil is going to continue to remain high.”

Pavlik’s thesis echoed that of TortoiseEcofin portfolio manager Rob Thummel, who also cited continued growth in the economy as being a driving force for the energy sector in 2022.

Thomas Hum is a writer at Yahoo Finance. Follow him on Twitter @thomashumTV

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