The September was a difficult month for the biotechnology sector as Democratic Presidential Candidate Hillary Clinton urged the regulators to more closely monitor drug prices. Clinton’s tweet prompted huge sell-off of biotech-related stocks. The market’s reaction was exaggerated as the investors barely had any understanding of Clinton’s future plans. The market’s reaction also took the analysts by surprise who do not believe the biotechnology sector has yet approached the bubble market because the valuations have been driven by impressive growth over the last few years. They were though mindful of the fact that even small news could significantly influence the behavior of the market participants. But it is also important to understand biotechnology sector insiders and investors have no one but themselves to blame because sudden price increases draw unusually close scrutiny in a politically charged environment like the one we are witnessing now.
America pharmaceutical companies are also being hurt by the appreciation of U.S. Dollar which has hurt their sales and bottom line profitability. The companies have responded by engaging in cost-cutting measures, only further harming the overall U.S. economy. But I still have allocated only 2 percent to municipal bonds due to their highly illiquid nature. They may be easy to sell but one has to take transaction costs into account when determining the liquidity of an asset. Moreover, individual municipal bonds can be quite expensive to acquire. I may buy them from the discount brokers but the trading commission in built into the price of the bonds rather than being charged separately. This makes it quite difficult for me to determine the commission I may be paying. In addition, brokers do not usually provide good prices to investors like me whose purchase order is quite small in size.

The latest tax policy has encouraged most Korean companies to raise their dividend payments which do increase the appeal of their equities to me. The Financial Times considers Korea an attractive bargain at the approximate price earnings ratio of 15. I will also invest 2 percent in the Indian equities because India is expected to surpass China in 2016 to become the fastest growing emerging economy in the world. India is paying close attention to inflation figures which made it possible for the country’s central bank to recently lower the interest rates. A stable and appreciating Indian Rupee also reduces the foreign exchange risk for the U.S. The average earnings of Indian companies are expected to grow by 7 percent this year and this figure is higher than the average earnings growth rate of the MSCI All Country World Index.