Tech and Biotech Have It All for 2016
We’re looking at slow growth and higher interest rates in 2016. Not your best scenario for making money in stocks. With market multiples near 20 times earnings it’s time to look for stocks that can grow in spite of a slow economy. As well, we want to look for rising dividends where we can find them.
In tech we feel our clients have to own “Old Tech” names that pay dividends as well as the “Disruptors” that are remaking entire industries and experiencing huge growth as a result. The old tech companies have been playing catch up for the last several years and look able to enjoy the fruits of a connected world. They now pay solid dividends and seem on a path to continue raising them. The disruptors may need a pullback for better entry prices but they have years of out-sized growth in front of them.
In biotech the big names provide great near and long term growth potential as their current products enjoy very large and growing markets, and they possess deep pipelines of future product candidates. Most pay dividends that are raised consistently and most are trading at market multiples and lower. there are good ETF (Exchange Traded Fund) choices for both sectors.