We want to repeat that this is an extraordinarily risky time to be investing, regardless of the market or industry you’re focusing on. That makes your responsibility to stay safe and make smart decisions even greater than usual.
It has become apparent that the coronavirus is affecting most financial markets negatively, and, so far, there is only one sector that is performing better than most: healthcare. Parts of the healthcare sector, more specifically the biotech companies that are involved in developing a cure or a vaccine for COVID-19, are predicted to continue growing even if we hit a recession.
Why is Healthcare so Interesting Right Now?
Based on this, healthcare might be one of the better investment opportunities in the near future and potentially a way to protect some of your funds during an extended recession or even financial depression.
The question is how one can invest in healthcare, which is why we thought we’d take a look at everything you need to know about investing in the industry.
Be Wary and Take Nothing for Granted
Before providing you with a few tips and strategic advice, we want to offer a warning. As always when investing and trading, especially during times like this when the global economy is rather unstable, you have to be careful.
The following advice that we’re providing is only supposed to be used as suggestion. Remember that there are never any guarantees when investing and you can’t trust anything or anyone blindly.
In the end, the only thing you can rely on is your own analytic work and predictions, which may or may not be based on what others tell you. Also, due to the financial instability that we’re currently experiencing, you have to be extra careful.
Consider CFD Trading
One of the main issues with long-term investments is that it can take many months or even years before you get the return your hoping for, particularly during a recession. Therefore, we suggest you give CFD trading a try.
When trading rather than investing, you’ll have the option of opening short-term positions and going both long and short. As you can imagine, the ability to go short can be very useful during a market collapse.
And, while most forms of online trading are currently not available in the United States, CFD trading is legal in most countries in Europe, Asia, and even Australia.
The benefit of CFD trading is that you can use licensed brokers to invest in everything from stocks to cryptocurrencies. Naturally, that includes healthcare stocks and even indices and ETFs made up from biotech companies, which brings us to our next point.
Invest in ETFs and Indices Instead of Single Stocks
Trying to figure out which biotech companies will benefit from the ongoing coronavirus outbreak is more or less impossible. For those who manage to invest in the right company, the potential return could become astronomical. However, for most, a random healthcare investment is not going to pay off in the end.
But, there is a smart way around this, which is to invest in baskets instead of single securities.
For example, Exchange-traded Funds such as The iShare Nasdaq Biotech EFT (IBB) – which consists of several industry-leading biotech companies currently working on the coronavirus – provides a more diversified healthcare investment. In turn, that gives you a better chance of making a profitable investment.
With all this being said, we want to repeat that this is an extraordinarily risky time to be investing, regardless of the market or industry you’re focusing on. That makes your responsibility to stay safe and make smart decisions even greater than usual.
In fact, most financial experts are recommending investors and traders protect their funds in “safer” markets such as gold or cash for the time being. Not until we know exactly where we’re headed and what the coronavirus will result in on a socioeconomic level, should we start planning for future investments.