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Are There Any Safe Investment Niches Today?

The long expected Trump trade war is beginning and the markets are barely containing their anxiety. Both the Dow Jones and the S&P 500 are down for the month. As we wrote our article about should you buy gold today, the S&P 500 had its worst 2nd quarter opening in 89 years. That was the year of the crash that ushered in the Great Depression.

The markets have continued trending upward despite seeming to be overpriced. That is because earnings keep increasing. But, what happens in a trade war is that earnings take a big hit. CNBC talks about a bear market before the current correction is over with.

Amid sharp sell-offs and quick rebounds, one strategist forecasts a possible bear market for Wall Street before all is said and done.

“I wouldn’t be surprised if we saw a 15 percent or even a 20 percent move off the highs before this thing finally bottoms out,” Matt Maley, equity strategist at Miller Tabak, told CNBC’s “Trading Nation” on Tuesday.

So, if the market is heading south, are there any safe investing niches today? Consumer stocks like Clorox and Procter & Gamble are relatively flat but have not performed all that well on the year. Utilities like Southern Company may not see direct effects of a trade war with China but as interest rates go up their dividend will look less attractive and the stock price will adjust. Where else can you look for safe investments today?

Biotechnology

At the start of the year we wrote to invest in gene editing companies.

The world of medicine is about to change. Diseases that had no treatment and conditions that cause lifelong suffering may well be cured at the source. Biotechnology has advanced to the point where the human genome can be edited and fixed! Companies that are on the leading edge of this new technology will not only change the world of medicine and your life. They can be profitable as well.

Learning to read the human genome has unlocked virtually unlimited possibilities for the treatment and cure of diseases. The companies that learn to harness this knowledge have a shot at riches beyond imagining. But, the  key to success in this realm is to do so efficiently and promptly before competitors come along with competing treatments.

Because picking winners in the world of biotech can be a gamble, it is wise to invest in several startups or in a biotech ETF in order hedge your risk and increase your chances of picking a winner. ETFdb.com provides a biotechnology ETF list that you might consider reading.

Biotech ETFs invest in stocks of companies in the biotechnology industry, many of which are involved in the use of biological processes such as recombinant DNA technology, molecular biology, genetic engineering, and genomics.

The current value of many of these companies lies in the promise of a profitable set of products. Thus they are not affected by the immediate swings of the economy or the markets. This makes them a safe investing niche in regard to a developing trade war or economic downswing. They do, however, have their own set of risks and the way to manage risk in this sector is to diversify with several well-chosen companies or an ETF or two.





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