The year 2020 has challenged us all. In several decades, the most severe economic contraction gave rise to monetary and budgetary support measures on an unprecedented scale, which changed the investment landscape. As 2021 approaches, the promise of vaccines against Covid-19 is about to change the game. It encourages us to forecast a return to pre-pandemic activity levels. Mass vaccination campaigns, health measures, government spending and monetary support will accelerate economic recovery and trading stocks. If the pandemic’s effects will remain throughout 2021, the cyclical recovery will probably continue, albeit unevenly.
Shares of biotech companies included in the fight against the coronavirus have driven equity markets higher in recent months. Investors have flocked to various stocks of companies eager to find a vaccine or drug against COVID-19. Betting on biotechnology stocks on the stock market may seem like a gamble on the future. Some investors are now wondering if they have missed an opportunity to invest in biotechnology. However, it is not too late to invest in these stocks.
Don’t put all your money into biotech stocks
Biotech stocks come with high volatility which, in addition to their own timeliness, will react to market trends. Therefore, it is better to focus on three to four stocks maximum because each value requires careful monitoring. Let it be clear: disappointment comes at a high price with a stock value that can drop by 50, or even 80% in one session.
Considering all the above, you shouldn’t put all your money into biotech stocks. Because it is a risky investment by nature, the portion of your biotech stocks portfolio should not exceed 20-25%. Investing always comes with good strategy and planning. You need to research the market and find the stocks with promising performance. So, before investing, make sure to create an investment plan. As the saying goes, -” don’t put all the eggs in one basket”. It means investing in various funds and stocks from different fields and industry sectors. In that way, you hedge you from the risks and have more wiggle room in case of sudden market changes.
The best biotechnology stocks on the stock market
In December 2018, Moderna stock became the largest IPO in biotech history, raising more than $ 600 million with a market capitalization of $ 7.5 billion.
The current price of Moderna stock is not exactly cheap to invest in biotech. But Moderna has still to bring a product to market, and it is too early to know if the COVID-19 vaccine will gain official approval. However, the Moderna action was very successful thanks to the health crisis. The stock has soared from $ 19 to $ 85 in just three months. From a technical standpoint, Moderna stock is in an uptrend.
Johnson & Johnson
Johnson & Johnson is a US multinational established in 1886. The company mainly produces medical and pharmaceutical equipment. Common stocks are part of the Dow Jones Industrial Average. The company is listed in 37th place in the top 500 American companies’ ranking according to their turnover. Johnson & Johnson is one of the most important companies in the world to invest in biotechnology.
Gilead Sciences Company
Gilead Sciences is an American pharmaceutical company from California. The group is active in the research, development and marketing of drugs and specializes in antivirals used in particular to treat HIV, hepatitis and influenza. Gilead is also popular for its many acquisitions of smaller companies in the biotech industry.
Gilead made his NASDAQ debut in January 1992. Its IPO raised $ 86.25 million. Gilead is listed on the NASDAQ Biotechnology Index and the S&P 500.