The Omicron variant of the SARS-CoV-2 virus that causes COVID-19 may have you thinking about investing in the makers of vaccines. The pros and cons of this strategy are worth considering, weighing them against your risk tolerance and long-term goals.
Vaccine stock pros
If you’re considering purchasing stocks such as Pfizer (PFE, Financial), BioNTech (BNTX, Financial), Moderna (MRNA, Financial), Johnson & Johnson (JNJ, Financial) and AstraZeneca (AZN, Financial), companies that have Covid-19 vaccines on the market, here are a few of this move’s advantages.
1. Covid-19 isn’t going anywhere
What variants of the virus show is that there will be a continued need for vaccines and booster shots. As long as their vaccines are effective in decreasing the risk of infection, these companies will likely see increased interest from investors.
2. Current vaccines seem to be effective against Omicron
The vaccines against Covid-19 on the market seem to protect against the new Omicron variant, so that should boost the stocks related to those vaccines, particularly Pfizer and BioNTech.
3. Some vaccine-related stocks would be great investments anyway
Pfizer and BioNTech are both great options now, with the Covid-19 pandemic underway, but they’d arguably be solid investment choices had the pandemic never happened.
Cons to investing in vaccine-related stocks
Disadvantages to investing based on current events such as developments in the COVID-19 pandemic include these considerations and questions to ask.
1. Does this investment fit your long-term goals?
Would Pfizer, Moderna or Johnson & Johnson be stocks you would want to own if Covid-19 had never happened? If these stocks would be a nice fit for your long-term goals in investing, then add them based on their financial performance and profit and loss statements, not the latest variants of the virus.
2. Are you day trading or value investing?
If you are following the philosophy of guru Warren Buffett (Trades, Portfolio), current events might spark your interest in researching vaccine manufacturers, but it shouldn’t mean a buy unless the company is on solid financial footing. Ask yourself whether you are day trading or planning to buy and hold because a pharma stock is a value stock.
Keeping these considerations in mind, investors may find potential value opportunities among biotech companies.
