Cheap stocks can remain cheap for a long time, however, and it's unlikely that you'll see big moves in health care stocks until the Obama administration rolls out details of its health care plan. Isaly thinks some of those fears may be overblown. "He had an aggressive agenda, delivered in February, that now looks unrealistic," Isaly says.
What's an investor to do? Health care accounts for about 14% of the S&P 500, so if you own a broad-based index fund, you already own a big slug of health care stocks. If you want more, consider investing in a top-performing health care fund. The top performers for the past five years are in the chart. But you might want to wait until some of the industry's uncertainty has been patched up.
John Waggoner is a personal finance columnist for USA TODAY. His Investing column appears Fridays. new book,Bailout: What the Rescue of Bear Stearns and the Credit Crisis Mean for Your Investments, is available through John Wiley & Sons. Click here for an index of Investing columns. His e-mail is email@example.com. Twitter: www.twitter.com/johnwaggoner.