Saturday, June 23, 2012

How to play the Obamacare ruling

The Supreme Court's highly anticipated ruling on the constitutionality of "Obamacare" will rattle the stock and bond markets every bit as much as it shakes up the 2012 presidential contest.

With Americans spending nearly $2.7 trillion a year on medical treatments, health care accounts for 18% of gross domestic product and 12% of the Standard & Poor's 500. In other words, chances are good that your investment portfolio will be affected by the high court's decision.

It looks like the ruling will be handed down the week of June 24, the end of the court's current session. A decision either way could give a broad lift to the health-care sector in the short term, because it would eliminate uncertainty. But soon after, the stocks of various types of companies within health care would most likely follow separate courses. Regardless of whether the law is upheld or struck down or modified, some stocks will get clobbered, some will pop and others will barely budge.

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