Best of the Week
Most Popular
1. Five Charts That Show We Are on the Brink of an Unthinkable Financial Crisis- John_Mauldin
2.Bitcoin Parabolic Mania - Zeal_LLC
3.Bitcoin Doesn’t Exist – 2 - Raul_I_Meijer
4.Best Time / Month of Year to BUY a USED Car is DECEMBER, UK Analysis - Nadeem_Walayat
5.Labour Sheffield City Council Election Panic Could Prompt Suspension of Tree Felling's Private Security - N_Walayat
6.War on Gold Intensifies: It Betrays the Elitists’ Panic and Augurs Their Coming Defeat Part2 - Stewart_Dougherty
7.How High Will Gold Go? - Harry_Dent
8.Bitcoin Doesn’t Exist – Forks and Mad Max - Raul_I_Meijer
9.UK Stagflation Risk As Inflation Hits 3.1% and House Prices Fall - GoldCore
10.New EU Rules For Cross-Border Cash, Gold Bullion Movements - GoldCore
Last 7 days
Pension Crisis And Deficit of £2.6 Billion At Carillion To Impact UK - 22nd Jan 18
Two Factors for Gold That You Don’t Want to Miss - 22nd Jan 18
Why You Must Own Silver in 2018 - 22nd Jan 18
This Could Be The Hottest Mining Stock Of 2018 - 22nd Jan 18
Stock Index Trend Trade Setups for the SP500 & NASDAQ - 22nd Jan 18
Stock Market Deceleration / Distribution - 22nd Jan 18
US Markets vs Govt Shutdown: Stock Markets at all time highs - 22nd Jan 18
Land Rover Discovery Sport - 1 Month Driving Test Review - 22nd Jan 18
Why should you use high-quality YouTube to mp3 converter? - 22nd Jan 18
Silver As Strategic Metal: Why Its Price Will Soar - 21st Jan 18
Stocks, Gold and Interest Rates Three Amigos Ride On - 21st Jan 18
Why Sometimes, "Beating the S&P 500" Isn't Good Enough - 21st Jan 18
Bunnies and Geckos of Sheffield Street Tree Fellings Protests Explained - 21st Jan 18
Jim Rickards: Next Financial Panic Will Be the Biggest of All, with Only One Place to Turn… - 20th Jan 18
Macro Trend Changes for Gold in 2018 and Beyond - Empire Club of Canada - 20th Jan 18
Top 5 Trader Information Sources for Timely, Successful Investing - 20th Jan 18
Bond Market Bear Creating Gold Bull Market - 19th Jan 18
Gold Stocks GDX $25 Breakout on Earnings - 19th Jan 18
SPX is Higher But No Breakout - 19th Jan 18
Game Changer for Bitcoin - 19th Jan 18
Upside Risk for Gold in 2018 - 19th Jan 18
Money Minute - A 60-second snapshot of the UK Economy - 19th Jan 18
Discovery Sport Real MPG Fuel Economy Vs Land Rover 53.3 MPG Sales Pitch - 19th Jan 18
For Americans Buying Gold and Silver: Still a Big U.S. Pricing Advantage - 19th Jan 18
5 Maps And Charts That Predict Geopolitical Trends In 2018 - 19th Jan 18
North Korean Quagmire: Part 2. Bombing, Nuclear Threats, and Resolution - 19th Jan 18
Complete Guide On Forex Trading Market - 19th Jan 18
Bitcoin Crash Sees Flight To Physical Gold Coins and Bars - 18th Jan 18
The Interest Rates Are What Matter In This Market - 18th Jan 18
Crude Oil Sweat, Blood and Tears - 18th Jan 18
Land Rover Discovery Sport - Week 3 HSE Black Test Review - 18th Jan 18
The North Korea Quagmire: Part 1, A Contest of Colonialism and Communism - 18th Jan 18
Understand Currency Trade and Make Plenty of Money - 18th Jan 18
Bitcoin Price Crash Below $10,000. What's Next? We have answers… - 18th Jan 18
How to Trade Gold During Second Half of January, Daily Cycle Prediction - 18th Jan 18
More U.S. States Are Knocking Down Gold & Silver Barriers - 18th Jan 18
5 Economic Predictions for 2018 - 18th Jan 18
Land Rover Discovery Sport - What You Need to Know Before Buying - Owning Week 2 - 17th Jan 18
Bitcoin and Stock Prices, Both Symptoms of Speculative Extremes! - 17th Jan 18
So That’s What Stock Market Volatility Looks Like - 17th Jan 18
Tips On Choosing the Right Forex Dealer - 17th Jan 18
Crude Oil is Starting 2018 Strong but there's Undeniable Risk to the Downside - 16th Jan 18
SPX, NDX, INDU and RUT Stock Indices all at Resistance Levels - 16th Jan 18
Silver Prices To Surge – JP Morgan Has Acquired A “Massive Quantity of Physical Silver” - 16th Jan 18
Carillion Bankruptcy and the PFI Sector Spiraling Costs Crisis, Amey, G4S, Balfour Beatty, Serco.... - 16th Jan 18
Artificial Intelligence - Extermination of Humanity - 16th Jan 18
Carillion Goes Bust, as Government Refuses to Bailout PFI Contractors Debt and Pensions Liabilities - 15th Jan 18
What Really Happens in Iran?  - 15th Jan 18
Stock Market Near an Intermediate Top? - 15th Jan 18
The Key Economic Indicator You Should Watch in 2018 - 15th Jan 18
London Property Market Crash Looms As Prices Drop To 2 1/2 Year Low - 15th Jan 18
Some Fascinating Stock Market Fibonacci Relationships... - 15th Jan 18

Market Oracle FREE Newsletter

6 Critical Money Making Rules

Investors Get On Board the Biotech Bandwagon with ETFs

Companies / Sector Analysis Jul 30, 2009 - 02:30 PM GMT

By: Money_and_Markets

Companies

Best Financial Markets Analysis ArticleRon Rowland writes: The stock market isn’t just a big block of stone that moves all at once. So I’m always looking for market leadership. Even in a strong market, a smaller group is almost always breaking ahead.


And right now, biotechnology stocks are moving up faster than most anything else. Just last week Human Genome Sciences (HGSI) surged more than 400 percent thanks to successful trials of a new lupus drug.

Biotechnology is a fascinating sector, one that’s made (and lost) a lot of money for millions of investors in recent decades. That’s why, in my opinion, you should become familiar with this industry.

What is biotechnology, anyway? Broadly speaking, it’s the application of technology to biological materials — plants, animals and people. Nowadays a lot of biotechnology involves manipulating genetic material: The DNA that forms the basis for life.

The goal is to produce new and useful substances that make life better and, of course, turn a profit along the way.

Gregor Mendel — Inventor of Biotechnology

Strangely, though, the man widely called the “father of genetics” wasn’t interested in profit at all. Gregor Mendel was a nineteenth-century Catholic monk from Brno, a city in what is now the Czech Republic.

Gregor Mendel's pea plants were the foundation of modern genetic science.
Gregor Mendel’s pea plants were the foundation of modern genetic science.

Born on a farm in 1822, Mendel was encouraged by colleagues to improve the abbey’s gardens — a source of food for the poor as well as their own kitchens. Noticing variations in the plants, he launched a careful study to find an explanation.

Between 1856 and 1863, Mendel cultivated some 29,000 pea plants, keeping careful records to note how succeeding generations changed based on their ancestry. He published the results of his study in an academic paper that was promptly ignored by scientists of the day.

Mendel then turned his research to honeybees but found them less cooperative than pea plants. He died in 1884, probably never dreaming he would one day be called a scientific pioneer.

Modern Genetics Is Born …

Decades later, scientists rediscovered Mendel’s work and replicated his results. Twentieth-century genetic research ultimately led to the discovery of DNA and attempts to manipulate the structure of life.

The industry really took off after 1980, when the U.S. Supreme Court ruled that a genetically-altered micro-organism could be patented. With the door now open to profit, private genetic research soared.

Most people associate biotech with medicine, which is indeed a big part of the industry. But there’s a lot more, too …

Biotechnology has revolutionized the agriculture business.
Biotechnology has revolutionized the agriculture business.
  • Biotechnology has revolutionized the agriculture business, leading to higher-yielding crops and more efficient animal husbandry.
  • Bio-fuels, based on plants like corn or animal by-products, could someday supplement, or even replace, our dependence on oil and natural gas.
  • Genetic testing can help identify people who are vulnerable to certain diseases so they can take precautions.
  • Gene therapy involves the replacement or repair of defective genes and may lead to a cure for cancer and many other diseases.
  • Pharmaceuticals produced through genetic research can be highly targeted toward specific conditions and are often more effective than traditional medications.

Scientists around the world are racing to make the next big biotechnology breakthrough. The winners: Consumers like you and me … we’ll enjoy better health, tastier food, and lower costs for things we buy every day.

Investing in Biotech With ETFs …

How can you make money in biotech? Well, you could bet on any of the tiny stocks that claim to have a sure-fire winning discovery. But most of the time these bets don’t work out. You can easily lose your shirt, in fact.

A better way is to bet on the entire sector — and exchange traded funds (ETFs) are a great way to do it. Currently there are six biotech ETFs. Each has its own particular portfolio methodology. Here’s the full list:

  • iShares Nasdaq Biotechnology (IBB)
  • SPDR S&P Biotech (XBI)
  • Biotechnology HOLDRs (BBH)
  • First Trust Amex Biotechnology Trust (FBT)
  • PowerShares Dynamic Biotech & Genome (PBE)
  • PowerShares Global Biotech (PBTQ)

Which should you buy if you want to get involved in biotech? That’s your decision. All these ETFs have advantages and disadvantages. I’ll give you a couple of pointers, though.

IBB is a liquid way to trade the volatile biotech sector.

Source: TradeStation

If you intend to trade actively, trying to capture the biotech sector’s short-term dips and rallies, IBB is the most liquid ETF in this space.

If you are investing for the long term, XBI has a good mixture of solid large-cap biotech stocks with promising small companies.

Remember: This is a volatile sector. Biotech stocks can make sharp moves in either direction in the blink of an eye. So don’t trade with money you can’t afford to lose.

If you’re willing to speculate, though, biotechnology can spell opportunity both now and in the future. Do your homework, and you can unlock the potential.

Best wishes,

Ron

his investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com .

Money and Markets Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

DNA Biotechnology
04 May 10, 09:42
DNA Biotechnology

Your blog is really Excellent. it inspires the reader who has that great desire to lead a better and happier life. Thanks for sharing this information and hope to read more from you..


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules