As I’ve stated earlier, my readers know that I’ve advised an investment strategy that steers clear of retail stocks. However, there are some companies that can continue growing even if economic growth remains muted.
One sector is biotechnology. An investment strategy that incorporates some biotech companies can help mitigate overall portfolio volatility, even if economic growth were to weaken. People get sick regardless of the strength or weakness behind.economic growth.
Of course, biotech companies can be a risky investment strategy as their success or failure depends on creating innovative new drugs, and not the level of overall economic growth here in America or abroad.
One way to approach an investment strategy in biotechs is to own a basket of larger integrated companies along with a few smaller, riskier firms that offer a promising pipeline of drug development.
Focusing on research and development is important for future biotech innovations, and it’s one characteristic I look for as part of an investment strategy in the biotech sector. One example of the type of company that might be worth exploring further is Biogen Idec Inc. (NASDAQ:BIIB). Even with growth in the American economy being relatively weak, this giant biotech firm is still generating overall revenue growth above 25%.
Chart courtesy of www.StockCharts.com
The stock has performed extremely well over the past year, and I would prefer waiting for a pullback before looking to add this type of company into a well-diversified portfolio.
For the health of your investment strategy, make sure to incorporate some companies that are less affected by weaker growth in the U.S. economy. This gives you exposure to the market while mitigating overall risk.
This article is brought to you courtesy of Sasha Cekerevac from Daily Gains.