Yellen is Right - Sell Biotech Stocks Now

Despite their high times of late, I agree with Janet Yellen’s Fed and see risk in the extended biotech sector today. Biotechnology stocks have outperformed the broader market this year, as the high risk, high-beta issues have remained en vogue. However, for two very important reasons, I would sell biotechnology today. So I’m suggesting holders of the popular iShares NASDAQ Biotechnology (Nasdaq: IBB) security divest positions. For those believers in specific biotech ideas, like say Gilead (Nasdaq: GILD) for instance, who want to hold on for the longer term, I suggest hedging industry risk by writing calls or holding puts in the IBB security if enough liquidity exists in the options market. Otherwise, you might use unlevered short industry ETFs if possible, or pare trade your name against another. See the full report here: I Agree with Yellen, Sell Biotech Right Now.