How much should you invest in a medical device ETF?
Investors have different views about how much is too much to put in one stock, but a good rule of thumb is to invest no more than 5% of your total portfolio in a single stock. Even if you buy a medical device ETF that owns lots of individual stocks, it's still smart to limit how much you invest.
How to invest in medical device stocks?
Another alternative for investing in medical device stocks is to buy ETFs. An exchange-traded fund is a marketable security that tracks a certain index or group of stocks based on a common characteristic or focus and trades on a major stock exchange. ETFs have some of the properties of mutual funds and some properties of common stock.
Is it safe to invest in medical stocks?
Although there certainly are risks associated with investing in medical stocks, there's also the potential to generate tremendous long-term gains. This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service.
What is the advantage of buying a medical device ETF?
The primary advantage of buying a medical device ETF is that it provides diversification across a large number of medical device stocks. For example, the iShares ETF holds positions in nearly 60 individual stocks while the SPDR ETF owns nearly 70 individual stocks.
What is the Dow Jones Select Medical Equipment Index?
Select Medical Equipment Index, which tracks the performance of U.S. medical device stocks, has delivered a total return more than 60% greater than the total returns of the Dow Jones Industrial Average and S&P 500 indexes over the last 10 years.
What is a 510k premarket?
Most Class II medical devices, however, require companies to file what's called a 510 (k) premarket notification. The name, by the way, comes from the section of the U.S. Food, Drug, and Cosmetic Act, which addresses how medical devices can be approved by the FDA.
How many medical device companies are there in the US?
This application has to include clinical data that demonstrate the safety and effectiveness of the medical device. There are at least 32,000 medical device companies in the U.S. and Europe.
What are the factors that contribute to the growth of the medical device industry?
Although aging demographics play a role in this increase, other factors such as diet and physical inactivity contribute to the trend as well. On a positive note, technology innovations should also generate growth in the medical device industry.
How much will the medical industry grow in 2030?
Zacks Equity Research projects that global sales for the medical industry will increase by around 5% annually with the total market reaching close to $800 billion by 2030. The global high-tech medical device market is projected to grow at a much faster rate.
What is a medical device?
Food and Drug Administration (FDA) defines a medical device as any "instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including a component part, or accessory" that is used in diagnosing, curing, preventing, or treating a disease.
