New technologies in healthcare have interested me for years. I recently learned about this one and wanted growth investors to know that these new ideas can be supported by educated investors following some old rules of investing.
I was amazed over the weekend to read about an implantable microchip that can actually place a pharmacy inside our bodies. My first reaction was near panic. I’m not always supportive of allopathic medicine but, after reading more, I can certainly see the potential benefits.
These devices can be wirelessly programmed to release drugs inside the body while being monitored and controlled remotely. Upon implantation, drugs are stored in microreservoirs and released by electrical current. Some of these microchips can even sense when drugs are needed.
This is just one of many new technologies that we may be hearing more about and you can bet professional investors have an eye on them too.
Investing in the technological wonders of the future can be profitable. It also involves great risk. Here are a few things to keep in mind:
1) Investing in a particular technology can involve buying stock of one particualar firm or in the entire sector. Sector investing, due to the narrow focus, may experience greater volatility than investing more broadly. Keep that in mind and try not to place more than 5-10% in one area.
2) Profitability, a strong balance sheet, and a solid sales pipeline are reasonable indicators that the stock is worthy of your investment.
3) Don’t be greedy. Should the new technology you invest in become successful, consider taking some profit off the table as you allow the underlying position to grow. Also, don’t be afraid to set a lower limit. Many new ideas fail. Your investment doesn’t have to if you apply a few rules.
Until next week,
Susan R. Linkous