Published On: Wed, May 4th, 2016

Why You Should Be Investing In Pharmaceuticals

If you’re struggling to decide on a niche to invest in, then pharmaceuticals may be the sector for you. The pharmaceutical industry is worth billions. Developments in the last few years have pumped even more capital into the niche. Whether you need a specialty or you just want to diversify your portfolio a little, pharmaceuticals are a great option. Here are some of the main reasons to invest in this niche.

health

First of all, the pharmaceutical industry has shown a lot of progress and growth in recent years. 2015 was a particularly exciting year for anyone involved with the sector. 18 new oncology drugs were approved for use in the US, along with several other approvals. Aside from that, several thousand new pills and medicines are in development. This makes for a promising pipeline, which will help investors out of trouble for years to come. The biggest focus for all medical science at the moment is cancer. This is expected to spur along the pharmaceuticals industry in the future. After that, neurology and infectious diseases are the next big topic for medicinal companies. If you want to invest in pharmaceuticals, there’s certainly no shortage of options. News sources like Investing Engine can be a big help when planning your first big purchase.

Another big pro about the pharmaceuticals industry is its potential for savings and profit margins. These days, people are living longer than ever before. As a result, there’s an increasing demand for effective medications and treatments. This demand is only getting bigger, so you can count on a certain amount of stability surrounding pharmaceuticals. Furthermore, medicines are always becoming more sophisticated. This will reduce the cost to governments and health organizations providing medical care. The pharmaceutical industry is not only great at saving money, but promises a pretty consistent net profit too. Of the main industrial sectors, pharmaceutical companies boast some of the healthiest profit margins. At times it has beaten car manufacturers, oil, gas and banks. A 2013 report from Forbes showed that the pharmaceutical giant Pfizer had an incredible margin of 42 percent.

Pharmaceuticals are a fairly narrow niche too, which makes it easier to assess a stock before you put your money down. This is a common pattern for any sector dominated by a few big firms. Remember that large, well-established companies are almost always a safer bet than smaller pharmaceutical businesses. Sure, there might be an up-and-coming firm that’s just developed an incredible new drug. In these cases, it’s just a matter of time before a major corporation will partner with it, or even buy it. the start-up company will put up little resistance, as it means better distribution channels. Also, if regulatory bodies pull the plug on a new drug, larger firms will be able to take it back to the drawing board.

If you’re looking for an investment with little risk and high potential for returns, then investigate the pharmaceutical niche. It may take a large slice of your capital to break into this sector, but I’m sure you’ll agree that it’s worth it!