biotech stocks 2012

It's not enough to understand long- term trends, today's investors need to have the ability to move quickly, especially when it comes to biotech stocks.

But here is what you need to know about biotech stocks: none of them are created equal.

For all their potential, bio tech stocks remain among the most challenging for investors like you to identify, select and earn money on.

However, with a little bit of the right guidance you can narrow your list to the stocks with the highest likely upside.

In fact, I've developed a five- point checklist of what I look at when screening biotech stocks that I'd like to share with you.

It may not be a road map. The biotech sector just isn't that easy and "x" almost never marks the spot.

But it is a great place to start if you are serious about separating the pretenders from the contenders.

Five Steps for Successful Biotech Stock Investors

As you begin to break down a potential stock consider the following as it relates to your decision.

1) Choose your niche.

Biotech is a big term and an even bigger sector. There are literally thousands of companies trying to make their move in everything from vaccines to nano-technology.

There's quite literally no way you can know everything, so stick to the parts of the sector you believe have the biggest potential.

For instance, I think some of the biggest innovations and profits will come from bio tech companies that link living systems with their digital counterparts.

So I tend to concentrate my biotech investments in companies that are exploring synthetic biology and computational bioinformatics.

To me it's a no brainer.

While there is no question that traditional bio tech will be big, over the next few years we will see the line blur very rapidly between what we need to live and how we actually live - aided by technology.

Admittedly, I have a rather selfish reason...