The last couple of years have seen big pharma companies such as Moderna and Pfizer gain more investments than ever before. In essence, big pharma has thrived where fears and viruses have ravaged.
Yes, investors who put all their chips in Big Pharma over the last couple of years have been substantially rewarded. However, if you’re considering putting in all your chips now, there’s good reason to be hesitant. Before you make an investment decision, there are a few things to bear in mind before taking the plunge. With all the volatility in the market, every little bit of pandemic news swings the market like an ever-swinging pendulum. Before Putting all your apples in one basket, current and future investors should consider the following trends before going all-in.
Consider Your Finances and Outlet
Before anything else, consider what’s at stake and how much you are willing to invest and what investment platform you wish to use. You’re going to want a platform that is the most convenient and swift in buying/selling options. Just as anyone running a business must have an established payment gateway for quick and easy transactions, so too should be the ease of which you buy and sell shares. With that said, your financial investments in the market should be considered no less important than any other business transaction
Pandemic-Related Impacts on Stock Trajectory
As much as the progression of the pandemic boosted many pharma stocks, its descent could be as equally impacted by declining pandemic severity. The unprecedented spread of omicron caused even the top infectious disease expert to claim the variant will infect “just about everybody,” Fauci said in a recent statement. While the spread is not something to take lightly, its lacking severity is actually good news for the pandemic.
We’re not there yet, however, the pandemic trajectory provides bleak long-term outlooks on the sustainability of the current share prices. While big pharma will always have its productive income, the current highs are not likely to be sustained as more people receive vaccines and boosters. With all the current focus on these stocks mainly vaccine-related, know when to pull the plug when the time is right.
Downward “Steps” Forming on the Line Chart
“Steps” refers to the makeup of the stock lines. In the case of upward spikes or “steps”, it is a good indication of an upward trend that is likely to continue its ascent. In the case of downward spikes with lower highs and higher lows as both Moderna and Pfizer are indicating on the chart, it’s certainly a troubling trend.
In the case of stocks, line charts are like reading the vital signs of the stock market, except these lines can give you a glimpse of its future vitals. These lines provide hidden answers about things such as overall market volatility or trajectory indicators.
Moderna at its highest was 484/share in early August of 2020, while Pfizer’s peak came much later in December 2020. Since both of their respective peaks, both have shown a steady decline, Moderna’s being more pronounced with its once monumental share price now condensed to 210/share. Meanwhile, Pfizer’s much less pronounced descent, though slight, is reflecting a merely identical downward trend Moderna experienced after its August high. Both of these indicators are a tell-tale clue that you’ve missed the boat and shouldn’t take the bait of buying shares at the current low.
Market Uncertainty
In today’s world, any news that leaves an uncertain immediate or long-term future reflects the same uncertainty through distorted market volatility. That is to say, some stocks thrive on the sudden volatility, while others suffer. In the present conditions, big pharma has not performed well on days where the market is notably fragile.
Drug Shortages
Unpredictable drug shortages were littered throughout the course of 2021, both vaccine and non-vaccine-related. These shortages cause mass sell-offs that can leave you holding an empty bag. These shortages are partially due to abnormally high demand to which the supply
The Deciding Factor
While a short-term investment may not necessarily be a mistake, only invest if you have the time to monitor the course of its chart closely. It would also be unwise to invest without doing the necessary research related to your desired investment. In the case of pharma, searching the latest news, trends, and pandemic impacts play an intricate role in your decision.
In the end, the choice is ultimately yours. Understand that any stock you invest in is a gamble to some degree, so choose wisely, especially in the case of big pharma.
