Thinking About Buying Coronavirus Stocks? Answer This Question First
Since the beginning of the year, all three major market indexes are down. For instance, the S&P 500 is down by 12.6% year to date, while the Dow Jones Industrial Average is down by 18.3% over the same period. However, not all stocks have been performing as poorly as the broader market. For instance, shares of biotech companies Moderna (NASDAQ: MRNA), Inovio Pharmaceuticals (NASDAQ: INO), and Novavax (NASDAQ: NVAX) are up by 168.1%, 172.7%, and 483.2%, respectively. All three of these companies have posted massive gains for the same reason: They are all working to develop vaccines for COVID-19, and if they are successful, their stocks could skyrocket even more. However, before you jump on this bandwagon, there's an important question you need to ask yourself.
Investors looking to buy shares of Moderna, Inovio, or Novavax should ask themselves the following question: What is my timeline? Sure, buying shares of Moderna could mean massive returns over the next several weeks. However, whether Moderna will manage to develop a vaccine for COVID-19 successfully is far from a sure bet. After all, according to the World Health Organization (WHO), there are currently at least 70 potential COVID-19 vaccines currently in development. And even though Moderna has already started a phase 1 clinical trial, the company could still run into regulatory hurdles or negative results.
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Source Fool.com
