Medical Stocks – To Buy or Not To Buy?

Takeaway of this blog:

“Don’t try to predict which medical stock will skyrocket, you are better off tracking the market return by investing in a market index fund.”

Are you overwhelmed by what seems like the never-ending updates of COVID news? Well according to The World Health Organisation (WHO): “there is light at the end of the tunnel and countries all around the world are being distributed with vaccines” (WHO, 2020).

The most debated question right now is whether to take the vaccine or not. Are you taking the vaccine? Let me know down in the comments!

Did you know that the number of people willing to take the vaccine directly impacts the world economy? Take two scenarios for example:

Let’s say only 25% of the world population are willing to take the vaccine. It negatively impacts the overall market because consumers are still not confident about leaving their house.

What if 80% of the world population are willing to take it? It sparks up the entire market by boosting consumer’s confidence in spending and travelling. In such a way that catapults all industries into a booming era. How can you capture this profit then?

The answer to this is, you can’t. It is impossible to guess who will create the “best” vaccine because there are just too many competing medical companies. Everyone knows that if they’re first to develop the “best” vaccine, it grants them a fortune.

However, you can invest in index funds to capture the market return if it does rebound into a booming era.

So how do you necessarily “capture” the market return?

“Capturing the market return” means that you are investing in a market index such as the S&P500(US), FTSE100(UK), or the NIKKEI225(Japan).

There are many ways in which you can put your money into a market index fund such as investing in an Exchange Traded Fund (funds listed on the stock exchange) or invest directly through your financial advisor or broker.

If you are a frequent day-trader in the market, I suggest you to invest via Exchange traded funds because they don’t charge front-end fees (fees you pay upfront).

If you are an investor who have just embarked your journey, I suggest you to seek your financial advisor and invest directly through individual investment companies as they provide you the best opinion. (Be aware of your financial advisor that he or she might be a broker. Avoid brokers who claim to be financial advisors!)

My “BIGGEST” tip is

Don’t try to predict which company is going to develop the cure. Instead, if you believe that the market will recover, invest in a market index and capture the overall market return. You are better off investing in a market index fund than aimlessly searching for that “one” company that’s going to skyrocket.

Currently, I have positions on an S&P500 index fund and the Hang Seng HK index fund. My forecasts for the general economy is it will slowly pick up an upward trend because governments are still pumping money into the economy. What is your forecast of the 2021 economy?

If you don’t share the same perspective as I do, make sure to let me know down in the comments section down below! I am excited to see who has conflicting perspective and what’s their take on 2021! Happy New Year to you.

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