Economy’s Reopening? Buy These Shares
Despite a rocky start to vaccine distribution, vaccines in the United States are getting delivered at an enormous rate.
Despite the size and diversity of the U.S. (each state has its own method of getting these shots delivered), 18% of its population is now covered by a shot of some kind.
It’s already delivered 118 million shots thus far and is at a pace of delivering over 2 million shots per day.
That sounds like success to me!
And it only means good things to come as we reopen the world.
Furthermore, this means that we can look forward to an uptick in many companies long forgotten during the pandemic.
We’ve already seen this baked into prices across the board in the markets.
Anything initially pummeled this time last year has recovered to its all-time highs — think airlines, retail, casinos, etc.
And with the recent pullback we’ve seen, there’s a lot more room for these reopening stocks to grow.
So the question is, then, what sector is going to outshine the rest in 2021?
Interestingly enough, I believe one of the best bets is one that had a stellar 2020…
Biotech — Your Best Bet for 2021
The market focused in on biotech stocks in 2020 for good reason.
Vaccine development was the only thing that was going to reopen the economy.
And because of this, prying eyes from the big investors started to take notice of other drugs not related to COVID-19.
Money poured into the sector, which allowed more research, better trial data and eventually better treatment for a range of diseases.
Think about it: The Pfizer and Moderna vaccines were the first mRNA vaccines to have ever been developed.
And while it usually took companies years to develop vaccines for a disease, these two companies did it in less than a year, with Johnson & Johnson not far behind them.
With all of this public funding, do you think they’ll pack it up and stop there? I don’t think so…
MRNA vaccines have applications well beyond just COVID-19 in treating other diseases. This includes protection against other diseases like rabies or the Zika virus but also could be used to elicit T-cell response against cancer cells in patients.
Furthermore, for companies like Pfizer or Johnson & Johnson, this public funding goes a long way toward developing other drugs well outside of mRNA applications.
The money’s not run out, and there’s a lot more room to run for these companies.
Another thing to think about is the smaller companies out there that the FDA wasn’t able to review since the manufacturing of the drugs was done overseas.
Drugs can be reviewed and clinical trials that were shelved for COVID-19 vaccines can resume.
Add to this the recent market pullback and you have a perfect opportunity to potentially profit from a huge potential with added value.
With all of this in mind, exposure to the biotech sector I believe can be accomplished in two very similar but different ways…
The iShares Nasdaq Biotechnology ETF (NASDAQ: IBB) and the Defiance Nasdaq Junior Biotechnology ETF (NASDAQ: IBBJ) are two tickers that would both allow you to capitalize on biotech’s rebound.
These are both ETFs that hold a basket of stocks that allow you to invest in one kind of share without having to manage your own portfolio of biotechstocks.
The difference between the two is that IBB focuses on the biotech sector as a whole and IBBJ focuses on biotech companies with market caps under $5 billion.
This gives IBBJ a lot more potential for growth in its portfolio, but it also means that it carries a larger inherent risk.
Larger companies like Pfizer or Johnson & Johnson can take a hit if a clinical trial goes awry. Sometimes biotechs under $5 billion are “ride or die” on one clinical trial to fund the rest of their research.
No matter what your investing style is, though, IBB or IBBJ would be able to fit your needs!
Consider adding shares to your portfolio today!
I’ll see you then!
To a bright future,