The purpose of this article is to understand the best strategy to make investment decisions in 2016. Given the vast choices available in the market place, it can be confusing to decide where to invest the limited resources available. This paper will look at various options available and discuss the feasibility of each choice

1. A Detailed Analysis to determine the best Investment choice for the year 2016 1
A Detailed Analysis to determine the best Investment choice for the year 2016
Chaminda Rammandala
California Intercontinental University

2. A Detailed Analysis to determine the best Investment choice for the year 2016 2
Abstract
The purpose of this study is to understand the best strategy to make investment decisions in
2016. Given the vast choices available in the market place, it can be confusing to decide where to
invest the limited resources available. This paper will look at various options available and
discuss the feasibility of each choice

3. A Detailed Analysis to determine the best Investment choice for the year 2016 3
A Detailed analysis to determine the best investment choice for the year 2016
Financial investment is an important decision individuals and companies have to make when
deciding how to grow the assets currently they own. The purpose behind the investment decision
is to determine how much value it would make over a period of time by way of interest payment,
dividends or appreciation of stock price depending on the type of investment (Sharon 2015)
There are various methods and options to invest. Primarily the investment method is
determine based on the time factor. It is vital to have an understanding on how much time can be
put aside for an investment. This is mainly due to some investment choices take time to
appreciate the value and pulling out the funds before maturity may result in not getting the
expected result (John 2015)
There are many types of investments methods. Some of the examples are,
 Certificates of Deposits
 Bonds
 Stocks
 Mutual funds
 Real State
 Precious metals
Certificates of deposits are most often issued by banks. They mature on set amount of time
frames and extremely low risky hence the returns are low. Bonds are mainly issued by
governments and companies. Interested individuals and investment companies could buy bonds

4. A Detailed Analysis to determine the best Investment choice for the year 2016 4
and earn an interest. Due the low risk involved, returns are relatively low in this investment
method (Millard 2008)
Stocks are ownership interests in part of a company. Individuals and companies can buy
stocks of various companies who are listed in a stock exchange. Depending on the preference,
investor could collect dividends on the stock or sell the stock when the price of the stock
appreciate. Dividends and price appreciation of stocks depend on the profitability or expected
profitability of the company. There is a significant risk involved hence the returns are high (John
2015)
Mutual funds also another popular investment option. A portfolio of concentrated stocks
from a group of companies are put together by a professional manager. Often mutual funds are
focused on one sector or some specific product categories. Risk could be low or high depending
on the type of products and companies involved (Sharon 2015)
Investment options for 2016
It is paramount to understand the global and domestic trends in the political, economic,
legal, social and technology, when deciding the investment options. Some of the most notable
events and decisions affecting investment decisions in 2016 are, monitory policy of the federal
reserve, major changes in energy and commodity markets in the world and the strength of the
dollar (Sharon 2015)
The downward trend of oil markets which began in 2015 expected to continue through
2016. Due to the new entrance to the market such as Iran, fracking in US & Canada and political
tension in Gulf countries, especially in Saudi Arabia contributing to this trend. US monetary

5. A Detailed Analysis to determine the best Investment choice for the year 2016 5
policy was changed in the beginning of the year and federal reserve’s first interest rate hike was
introduced in nearly ten years. These factors will have a significant bearing on the investment
decisions (John 2015)
Feasibility of investing in Biotechnology sector
Technology and biotechnology sector is one of the notable outperformer compared to the
broad market during the six months following a federal reserve rate hike. S&P Capital IQ
expects 21% increase in earnings for the biotech industry, which is currently trading fourteen
times 2016 forward earnings.
From the February 2016, Biotechnology sector has gained 12% which is above average
compared to the rest of the sectors. Some of the notable examples, BioMarin pharmaceutical is
up 30% since the February 2016 and Incyte another biotech company gained 29%. Ligand
pharmaceutical has climbed 45% and Medivation stock price was up by 127% in 2016 compared
to the stock price they recorded in 2015.(Sharon 2015)
Some of the reasons for the upward trend in biotechnology sector is the new product pipeline
and the pricing power for the new potential drugs. Most biotech companies specialized in orphan
drugs. Orphan drugs have a selective customer base and those customers are often stay with the
company for life as it is essential to take those drugs to suppress the conditions their suffering.
This ensures healthy stream of income without having to face intense competition.
Conclusion
It is essential to understand the market conditions, risk factors and personal financial goals
when deciding the investment options. By having a financial road map, it is relatively easy to

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determine the level of risk should be taken, where to invest and what product groups. Same time
it is important to pay attention to local and global events and conduct a PESTEL analysis prior to
make decisions. Based on the market intelligence and trends, it is clear that current climate
favors investing in biotech sector creates more wealth through high returns.

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References
John, R, (2015) Making better Investment Decisions. Journal of portfolio management.
Retrieved from ProQuest virtual reference library http:/gale. proquest.com (05/20/2016)
Millard, A, (2008) Analyzing the fair market value of assets & the stakeholder’s investment
decisions. ProQuest dissertation publishing. Retrieved from ProQuest virtual reference library
http:/gale. proquest.com (05/21/2016)
Sharon, D, (2015) Evaluating Investment Decisions. Journal of Business Management
Retrieved from ProQuest virtual reference library http:/gale. proquest.com (05/20/2016)