Best of the Week
Most Popular
1.U.S. Housing Bull Market Over? House Prices Trend Forecast Current State - Nadeem_Walayat
2.The Coming U.S. Economic Collapse Will Trigger a Revolution - Harry_Dent
3. Stock Market Crash a Historical Pattern? - Wim_Grommen
4.Global Panic - U.S. Federal Government Stockpiling Ammo – Here’s What We’re Going to Do - Shah Gilani
5.AI, Robotics, and the Future of Jobs - Aaron Smith
6.This is Your Economic Recovery With and Without Drugs - James_Quinn
7.Gold and Silver Price Getting Set To Explode Higher - Austin_Galt
8.The Something for Nothing Society - Lifecycle of Bureaucracy - Ty_Andros
9.Another Interesting Stock Market Juncture - Tony_Caldaro
10.Inflation vs the Deflationary Straw Man - Gary_Tanashian
Last 5 days
The ISIS Menace - Just What We Need, Another War - 27th Aug 14
The Risky Business of Methane-Rich “Fire Ice” - 27th Aug 14
CFR Recommends Policy Shift that is Very Bullish for Gold - 27th Aug 14
Ukraine Standoff Signals Global Power Shift - 27th Aug 14
Stock Market Panic Decline Begins - 27th Aug 14
The Monopoly of the Government Education Cartel - 27th Aug 14
How to Invest in Silver Today for Double-Digit Gains - 27th Aug 14
The Big Solar Energy Breakthrough We've Been Waiting For - 27th Aug 14
U.S. Empire’s Bumpy Ride - 27th Aug 14
Gold Market and the Interest Rate Trap - 27th Aug 14
Stock Market Staring Into the Great Abyss - 27th Aug 14
A Look at the Coming 30-year Inflation Cycle - 27th Aug 14
Forex Trading - Will USD/CHF Rally Above 0.9200? - 27th Aug 14
Europe’s Depressing Economy Dog Days of Summer - 27th Aug 14
How The Coming Silver Price Bubble Will Develop - 26th Aug 14
A Nation of Shopkeepers - Supply-Side (Voodoo) Economics? - 26th Aug 14
Stock Market Bear Tracks Abound In Wall Street - 26th Aug 14
65,000 U.S. Marines Hold up a Mirror to the Economy - 26th Aug 14
Bitcoin Market Provides Clues for Investors - 26th Aug 14
The Key to Trading Success - 26th Aug 14
Will The US Succeed in Breaking Russia to Maintain Dollar Hegemony?... - 26th Aug 14
Even Mainstream Academia Worried about Massive Bubbles in Markets - 26th Aug 14
Iraq and Syria Follow Lebanon's Precedent - 26th Aug 14
Colonization by Bankruptcy: The High-stakes Chess Match for Argentina - 26th Aug 14
Dow Stock Index On The Cusp - 26th Aug 14
Prohibition Laws and Agency Regulations - 26th Aug 14
Will Canadian Regulators be Able to Avoid Final Fatal TSX Venture Exchange (TSX-V) Crash? - 25th Aug 14
HUI Gold Mining Stocks Elliott Wave Projection - 25th Aug 14
Stock Market Uncertainty Resolved With New High - 25th Aug 14
Go Forth Multiply And Replenish The Earth - 25th Aug 14
Dollar Dumping: When Actions Speak Loudest - 25th Aug 14
A Plethora of Currency, Stocks and Precious Metals Chartology - 25th Aug 14
Why Isn’t Fed Monetary Pumping Helping the U.S. Economy? - 25th Aug 14
Myths About Money and Inflation - 25th Aug 14
The Fed Will Raise U.S. Interest Rates in March 2015 - 25th Aug 14
Gold Price Manipulation Still Alive - 25th Aug 14
The Ebola Outbreak: U.S. Sponsored Bioterror? - 24th Aug 14
Instigating War in Europe - Understanding Ukraine in 15 Minutes - 24th Aug 14
LNG Catalysts About to Hand You the investment Opportunity of the Decade - 24th Aug 14
Another Interesting Stock Market Juncture - 24th Aug 14
The West Set Up the ISIS Endgame - 24th Aug 14
Gold And Silver Low Prices Are NOT The Reason To Own Precious Metals - 24th Aug 14
U.S. Housing Bull Market Over? House Prices Trend Forecast Current State - 23rd Aug 14
Inflation vs the Deflationary Straw Man - 23rd Aug 14
U.S. Interest Rate Rise to Occur Mid-2015 According to Fed's Williams - 23rd Aug 14
Bitcoin Price Continuation of a Move up - 23rd Aug 14
Gold and Crude Oil Price on the Verge of Something Big - Hero's Rarely Win - 23rd Aug 14
Oxaloacetate Feeds and GROWS Brain Cells - Alzheimers Cure? - 23rd Aug 14
Gold Rising Interest Rate Fallacy - 22nd Aug 14
Jackson Hole: Myth of the All Powerful Central Banker Continues - 22nd Aug 14
Partying On In The Terror State - Thank God for Nuclear Weapons - 22nd Aug 14
The Something for Nothing Society - Lifecycle of Bureaucracy - 22nd Aug 14
Hitting The ISIS Panic Button In The Middle East - 22nd Aug 14
US Stock Indices 10-Year Consolidation Patterns ... Upside Breakouts? - 22nd Aug 14
Gold and Silver Price Getting Set To Explode Higher - 22nd Aug 14
Deflation's Final Curtain Call - Part II - 22nd Aug 14 - Clif_Droke
Gold Big Picture: Most Important - 22nd Aug 14
How the “Uncertainty Factor” Drives Crude Oil Prices - 22nd Aug 14
Inflation, Interest Rates, and Why You Should Own Gold - 22nd Aug 14
U.S. Interest Rates Can Rise States Fed President - 22nd Aug 14
Why Emotional Discipline is Key to Trading Success - 21st Aug 14
Getting the Most Value from Your “Geriatric Cruiser” - 21st Aug 14
Mafia Boss Claims Stocks A Bubble, Buy Physical Gold and Silver - 21st Aug 14
Outrage! On The Beheading of Our Media Brother James Foley - 21st Aug 14
Stock Market Crash a Historical Pattern? - 21st Aug 14
The Black Box Economy - 21st Aug 14
The Bond Market is taking Advantage of Janet Yellen`s Dovishness - 21st Aug 14
Meet Your Investment Manager - 21st Aug 14
Gold and Silver Trading Alert as U.S. Dollar Soars to New Highs - 21st Aug 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The Biggest lie in Stock Market History Revealed

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

© 2005-2014 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

Free Report - Financial Markets 2014