If Youre In Your 20s Consider Buying These 3 Healthcare Stocks

Published in Stocks and Investing on Wednesday, August 13th 2025 at 12:00 GMT by The Motley Fool
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If you have decades to go before you retire, you want to make sure you own companies that know how to survive and thrive.

Why Young Investors in Their 20s Should Consider These Three Healthcare Stocks

For individuals in their 20s, the world of investing can feel overwhelming, but starting early offers a significant advantage due to the power of compounding returns over decades. The healthcare sector, in particular, stands out as a resilient and growth-oriented area, driven by aging populations, technological advancements, and ongoing innovations in medicine. This article highlights three healthcare stocks that could be particularly appealing for young investors looking to build long-term wealth. These recommendations are based on the sector's stability, potential for substantial growth, and the ability to weather economic downturns better than many other industries. While no investment is without risk, these picks emphasize companies with strong fundamentals, innovative pipelines, and market positions that could deliver impressive returns over the next 20 to 30 years.

The first stock recommended is Vertex Pharmaceuticals (NASDAQ: VRTX), a biotechnology leader focused on developing treatments for rare diseases, most notably cystic fibrosis (CF). Vertex has established itself as a dominant player in the CF market, with its flagship drugs like Trikafta generating billions in annual revenue. What makes Vertex especially attractive for young investors is its robust pipeline beyond CF. The company is advancing therapies for conditions such as sickle cell disease, beta thalassemia, and even potential cures using gene-editing technologies through partnerships like the one with CRISPR Therapeutics. In recent years, Vertex's stock has shown impressive performance, often outperforming broader market indices due to its high-profit margins and recurring revenue from chronic disease treatments. For someone in their 20s, investing in Vertex means betting on the future of personalized medicine. The global CF market alone is projected to grow, but Vertex's expansion into pain management and kidney disease treatments adds layers of diversification. Risks include regulatory hurdles for new drugs and competition from emerging biotech firms, but the company's strong cash position—over $10 billion in reserves—provides a buffer for research and development (R&D) investments. Over a long horizon, Vertex could benefit from demographic shifts, such as increasing life expectancies that heighten demand for chronic illness management, potentially turning a modest investment today into a substantial nest egg by retirement age.

Next on the list is CRISPR Therapeutics (NASDAQ: CRSP), a pioneer in gene-editing technology. This company is at the forefront of revolutionary treatments that could fundamentally change how we address genetic disorders. CRISPR's most notable achievement is Casgevy, a gene therapy for sickle cell disease and beta thalassemia, developed in collaboration with Vertex and recently approved by regulatory bodies like the FDA. This approval marks a milestone, as it's one of the first CRISPR-based therapies to reach the market, signaling the dawn of a new era in medicine. For young investors, CRISPR represents high-growth potential in a cutting-edge field. The stock has experienced volatility, typical for biotech firms in early stages, but its long-term prospects are bolstered by a pipeline targeting cancers, autoimmune diseases, and even diabetes. Imagine the impact: editing genes to cure inherited conditions could disrupt traditional pharmaceuticals, creating massive market opportunities. Analysts often point to the company's intellectual property strength and partnerships as key strengths. However, investors should be aware of challenges like high R&D costs, clinical trial uncertainties, and ethical debates surrounding gene editing. Despite these, the healthcare sector's innovation wave favors companies like CRISPR, especially as global healthcare spending rises. A 20-something investor with a high risk tolerance could see exponential returns if CRISPR's therapies gain widespread adoption, potentially multiplying an initial investment several times over the decades.

The third recommendation is UnitedHealth Group (NYSE: UNH), a diversified healthcare giant that operates through its insurance arm (UnitedHealthcare) and health services division (Optum). Unlike the more speculative biotech picks, UnitedHealth offers stability and consistent growth, making it a solid foundation for a young investor's portfolio. As one of the largest health insurers in the U.S., it benefits from the ever-expanding need for healthcare coverage, driven by an aging population and policy changes like the Affordable Care Act. Optum, in particular, is a growth engine, providing data analytics, pharmacy benefits, and telehealth services that are increasingly vital in a digital age. The company's scale allows it to negotiate favorable terms with providers and invest in technology, leading to impressive earnings growth. Over the past decade, UnitedHealth's stock has delivered compound annual growth rates that outpace the S&P 500, with dividends adding to total returns. For those in their 20s, this stock embodies a "set it and forget it" approach, as healthcare demand is relatively recession-proof—people need medical care regardless of economic conditions. Potential risks include regulatory scrutiny on insurance practices and competition from tech disruptors like Amazon entering healthcare. Yet, UnitedHealth's massive market cap and consistent profitability provide downside protection. By investing early, young people can capitalize on dividend reinvestment and share appreciation, potentially building wealth steadily over time.

Investing in healthcare stocks like these aligns well with the long-term horizon of someone in their 20s. The sector is poised for growth due to factors like technological innovation, increasing global health awareness post-pandemic, and demographic trends such as the aging baby boomer generation. Vertex offers exposure to biotech innovation, CRISPR to groundbreaking gene therapies, and UnitedHealth to stable, large-cap reliability. A balanced approach might involve allocating a portion of one's portfolio to each, diversifying across subsectors within healthcare. It's crucial to emphasize that while these stocks have strong potential, investing involves risks, including market volatility, regulatory changes, and company-specific setbacks. Young investors are advised to conduct their own research, consider dollar-cost averaging to mitigate timing risks, and consult financial advisors. Starting small and staying invested over decades can harness the magic of compounding, turning today's decisions into tomorrow's financial security. The healthcare industry's evolution—from AI-driven diagnostics to personalized treatments—suggests these companies could be at the heart of transformative changes, rewarding patient investors handsomely. In summary, for those embarking on their investment journey in their 20s, these three stocks represent not just financial opportunities, but a stake in the future of human health and well-being. (Word count: 928)

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