There has been extensive press coverage of proposed U.S. healthcare reforms. Although rapid, radical changes may have been contemplated during the recent election campaign, changes are likely to be staged and incremental. Whatever individual investors think about the proposed reforms and the massive lobbying efforts by the various industry groups, investor focus should be the potential impact of these changes on the revenues, earnings and share prices of healthcare companies.

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While the healthcare sector may have a reputation for being a challenging and risky segment of the market in which to invest, a number of success stories have emerged in 2009 that demonstrate the reward the sector holds for astute investors. While an understanding of the underlying science and technology can be helpful when making investment decisions in these companies, investment strategies similar to those which are used in other sectors apply for the most part to healthcare companies as well. For mature companies, the focus is largely on the same fundamentals that apply to any revenue generating business. For development stage companies, strategies may be more event-driven or based on momentum.

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