Financial experts often caution against chasing trends or attempting to time the market to maximize your investment returns. One needs to look no farther than the bankruptcy liquidations of a number of hot new tech companies (or "can't fail" banking institutions) to see the potential dangers of putting all your eggs in one sector's basket. However, when certain trends appear to be part of a more permanent change to the greater economy, funneling your funds to these areas can often pay off in a big way. If you're looking for investments that are poised to break out of the pack as winners, you may want to consider investing in the medical waste disposal industry. Read on to learn more about the types of medical waste investments that may be available, as well as why these investments may become the biggest moneymakers in your portfolio over the next few decades.
Is investing in medical waste a good idea?
Over the past few years, much media attention has been paid to Baby Boomers -- Americans born between 1946 and 1964. As this population ages (with those on the older end now able to qualify for full Social Security retirement benefits), the need for services targeted toward the elderly (from nursing care to assisted living to transportation services) will only continue to grow. While seniors certainly aren't the only category of people who generate biohazardous medical waste, as more and more nursing homes are constructed, the need for certified medical waste disposal services will only increase.
Because the disposal of medical waste is heavily regulated by the federal government (through the Environmental Protection Agency (EPA)), as well as various state governments, most entities that generate this waste find it more cost-effective to contract out the disposal services to an outside company. This helps these medical facilities avoid the potential fines and penalties for violation of waste disposal regulations with which they may not be familiar. Private citizens who regularly generate their own medical waste (such as diabetics who use hypodermic needles to administer insulin) may also take advantage of a central disposal services rather than undertake the effort needed to safely and legally dispose of this waste themselves.
What type of medical waste investments are available?
There are ways to invest in this industry on both the micro and macro levels. Your decision will likely rest on the amount of investment capital you have available and your willingness to be involved in the day-to-day operations of a business.
If you want a "set it and forget it" investment, you may want to look into individual stocks or index funds that invest in these companies. Because individual stocks are inherently riskier than index funds (as the company in which you invest could go out of business or declare bankruptcy, rendering your initial investment worthless), you'll want to do your research before purchasing, and may want to spread out your investment capital in several stocks so that the "hit" from a loser stock has less of an effect on your overall portfolio.
If you'd like a less risky option, an index fund may be the way to go. While shares of these funds are purchased just like shares of stocks, the underlying investment spans a number of companies within the same industry. This often accomplishes the same diversity and risk management as investing an equal amount in several related stocks but doesn't require as much research or legwork.
If you'd rather be more involved -- or if you have more funds at your disposal -- you may want to become an equity partner in a local or regional waste disposal company. By putting up seed money, you'll be able to help these companies expand their market area and serve a larger population, increasing profits. Depending upon the amount you're willing to contribute and the type of return you'd like to seek, you may be eligible for regular dividends as the company expands, or you may be able to recoup your initial investment with a certain amount of interest at the end of a specified time frame.