Best of the Week
Most Popular
1.Election Forecast 2015 - Opinion Polls Trending Towards Conservative Outright Win - Nadeem_Walayat
2.UK Solar Eclipse - End Time Sign, Judgement Day, Doomsday! - Nadeem_Walayat
3.Gold And Silver - When Will Precious Metals Rally? Not In 2015 - Michael_Noonan
4.Preparing for the Next Stocks Bear Market - Forecast 2015-2016 - Gary_Savage
5.Is a Stock Market Crash Imminent? - David Eifrig
6.Gold Price Slumps as US Dollar Soars, What's Next? - Nadeem_Walayat
7.US Dollar Forex Pairs and Gold Chartology - Rambus_Chartology
8.Election Forecast 2015: The Day Labour Lost the General Election - Nadeem_Walayat
9.The ECB Should End QE Next Month - EconMatters
10.Silver Price Poised to Surge - Zeal_LLC
Last 5 days
You Can’t Afford Not to Invest in This Latest Yesla Technology - 1st Apr 15
Election Forecast 2015 - Coalition Economic Recovery vs Labour Collapse - 1st Apr 15
Bitcoin Price Down Move Still in the Cards - 31st Mar 15
No Body Understands Debt - Living in a Free-Lunch World - 31st Mar 15
Will Gold Win Out Against the US Dollar? - 31st Mar 15
Middle East Balance of Power Matures - 31st Mar 15
Ed Miliband Debate Election 2015 Analysis - Labour Spending, Debt and Economic Collapse - 31st Mar 15
Gold and Misery, Strange Bedfellows - 31st Mar 15
Why are Interest Rates So Low? Ben Bernanke, Confused as Ever, Starts His Own Blog to Prove It - 31st Mar 15
Don’t Celebrate the U.S. Housing Market Recovery Yet - 30th Mar 15
A Middle East Nuclear Holocaust - 30th Mar 15
Peak Gold? – Goldman Sachs Research Warns of Peak Gold Production - 30th Mar 15
With Yemen Burning, Arab Spring II Is Underway - 30th Mar 15
No FED Bets From the BIS - 30th Mar 15
Election Forecast 2015 - Debates Boost Labour Into Opinion Polls Seats Lead - 30th Mar 15
Economic Recovery, Geopolitics and Detergents - 30th Mar 15
U.S. Dollar, Commodities and the Gold Miners GDXJ ETF Analysis - 30th Mar 15
Stock Market Short-term Downtrend - 30th Mar 15
David Cameron Election 2015 Debate Facts Check - Employment, Immigration, Debt & Deficit - 29th Mar 15
Stock Market About Ready to Crash! - 29th Mar 15
Reflections in a Golden Eye - Gold Market Rejection, Repatriation and Redemption - 28th Mar 15
Stock Market Inflection Point - 28th Mar 15
Gold And Silver - What Moved Price? Bab el-Mandeb And Uranus Square Pluto. What?! - 28th Mar 15
Stock Market Investment Parachutes; Do You Have Yours? - 28th Mar 15
Peak Gold Misunderstanding, is Gold About to Run Out? - 28th Mar 15
Deflation Watch: Key U.S. Economic Measures Turn South - 27th Mar 15
The Hard-Earned Truth About Recreational Real Estate - 27th Mar 15
Bitcoin Price Still in Important Territory - 27th Mar 15
Stocks Bear Market Conditions - Index Market Range Warning - 27th Mar 15
BEA Leaves Q4 2014 U.S. GDP Growth Essentially Unchanged at 2.22% - 27th Mar 15
Brazil Economy Victim of Vulgar Keynesianism - 27th Mar 15
Gold to Fuel Silver Price Upleg - 27th Mar 15
Gold and Silver Stocks Will Rise Again! - 27th Mar 15
Risk of ‘World War’ between NATO and Russia on Ukraine as Yemen Bombed - 27th Mar 15
FOMC Minutes Turned The Gold Tide - 27th Mar 15
Sheffield Hallam Election Battle 2015 - Lib Dems Go to War Whilst Labour Sleeps - 27th Mar 15
Gold Effect On Mining & Shale Wasteland - 27th Mar 15
How Stock Investors Should Play the 2016 Presidential Race - 26th Mar 15
MidEast Energy Alert: Why the Crisis in Yemen Could Get Ugly Very Fast - 26th Mar 15
Stock Market Downward Spiral of Dumbness - 26th Mar 15
The Monetary Approach Reigns Supreme - 26th Mar 15
Stock Market Large Gap Down, Despite the Algos' Push Back - 26th Mar 15
Crude Oil Surges, Gold price Spikes as Middle East Tensions Escalate - 26th Mar 15
The U.S. Housing Market Recovery Is Fabricated Optimism - 26th Mar 15
Why Yemen Is The Next Saudi-Iranian Battleground - 26th Mar 15
The Crude Oil Price Crash and China Economic Slow Down - 26th Mar 15
Global Financial Markets Are More Distorted Than Ever Before - 26th Mar 15
One More Stock Market Rally and Then a Huge Drop Expected - 26th Mar 15
Danger Will Robinson - Stock Market Crash Warning - 25th Mar 15
Learn the Basics of Corrective Elliott Waves - 25th Mar 15
Why CNBC Is Hazardous to Your Financial Health! - 25th Mar 15
Will Your Retirement Accounts Survive The Coming Tax Code "Revolution"? - 25th Mar 15
US Dollar - Americas Phoenix - 25th Mar 15
California’s Epic Drought: Only One Year of Water Left! - 25th Mar 15
What’s Wrong With Silver? - 25th Mar 15
SPX Futures Appear Weak. WTIC and Gold May Be at Max Retracement - 25th Mar 15
We’re at the Dawn of a “New Energy Age” - 25th Mar 15
A Very Weak U.S. Economic Recovery - 25th Mar 15
Zero UK CPI Inflation Rate Prompts Deflation Danger Propaganda For Fresh Money Printing - 25th Mar 15

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

US Economy Still on Life Support

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

© 2005-2015 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