To begin with, one needs to look out for those investments that have been performing well in the market over the last several years. Do not entirely rely on the performance of the past few years. You can check out for both private (venture capital) and public (NIH) bio-tech investments. They both seem to be doing well over the years and their value increases with time.
You also need to carefully analyze the profit margin on bio-tech drugs. Remember that these are products that are always on demand, thanks to the improved technological advances. The profit margin always tends to be on the higher side because of the simple fact that the drugs are cheap to produce, they have a high demand and are always recession proof. A successful drug can have a profit margin of 20 -30 %. Unlike other types of investments, bio-tech mutual funds have a lower risk factor because testing of the drugs takes about ten years and their probability of not being approved is minimal.
To be able to determine whether an bio-tech investment is worth your time or not, there are a few questions that should act as your guideline. You must first establish whether the drug can treat a disease that previously had no treatment and how large its market is. You must also establish the possibilities for the expansion of the label or patent of that particular drug whose shares you choose to buy.
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