Healthcare as a Defensive Sector?

Finance Portfolio Research & Analysis for Sept. 22-26, 2008 From our Global (includes the USA) research division and subsequently Global strategy analysts, the following financial analysis excerpts are from revisions recently completed on Globally based investment portfolios: SCR Step 1 Analysis: From No. D7 (Global) Financial Portfolio Research Revision [iShares (Wgt: MC)] S&P Global Health Care (IXJ) vs. [SPDR (Wgt: MC)] S&P 500 (SPY): (1) Observation Relative Strength: Results in the relative strength analysis of S&P Global Health Care (IXJ) versus S&P 500 (SPY) indicate that IXJ is fairly neutral SPY on a relative basis. This is near the observation made during last months revision. While the healthcare sector continues to be a defensive play during global economic weakness, it is doing so with less strength. (2) Observation Regression: Comparison of the linear regression to the time-series that has a 3-period forward shift finds the following formation: The price is below the linear regression, and the linear regression is above / equal to the time-series. Since the linear regression provides the "best fit" to the price path, this has near term neutral / negative implications for IXJ. (3) Observation Price Performance: S&P Global Health Care (IXJ) shows a continuation (that began early August) of a neutral / negative price path (flat / downward slope), and like last month, on weak indicators. Distribution of shares seems to be continuing at a fairly constant pace. Unfortunately, the D.J. U.S. Health Care (IYH), which still showed a positive statistic until mid-August, has sold off to match the observation seen in the global healthcare sector. [Reference Charts: D7-75 (relative strength); AD7A-75a (regression); AD7B-75b (price)] SCR Step 2 Implication & Strategy: (1) Possible Implication: The summary of the stated observations for IXJ is Neutral, and has near term Neutral implications. If you have been using IXJ to hedge the global economic slow down, you might want to tighten stops. One consolation for those of you holding on to healthcare securities is that the routing has not been as severe as has been witnessed in other sectors. Additional Observation: A bullish "Breadth Thrust" occurred late last week! We say THANKS to our research revision list subscribers with private and exclusive investment research with subsequent strategies. Take a look at the most recent post: Additional considerations: First, for most investors, a diversified investment portfolio approach combining stocks, bonds, money market securities, etc., is optimal. While financial diversification cannot protect against a loss from a declining market, it can reduce the volatility of the overall portfolio. Second, with the globalization of information technologies, college education becomes a prerequisite to most careers. Thus, a goal of successful investing in a variety of assets becomes crucial in providing the upper level education necessary for the future of your children. In consideration of that goal, studying the information available on this site, which has been kind enough to host our research in this article, will help. At www.StrategicCapitalResearch.com, we provide additional finance educational materials to what you find here in both investment books and videos. Between the two sites, you should be able to find enough information to get started toward achieving your education investment goals. Third, to the above analysis excerpt, the usual disclaimers apply. Since all Strategic Capital Research publications provide research that is conducted using historical data, a reminder needs to be made that the analysis of past market reactions cannot predict future market actions. In particular, no amount of historical data can predict the sudden changes that occasionally occur in financial markets. Finally, the reference chart numbers refer to both the portfolios and their completed auxiliary analyses that are located at

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