Pretty much everyone can see that tech is kind of a big deal right now. From Apple being worth a staggering $1 trillion come 2018 to the five biggest tech companies making up around 15% of the S&P 500 index weighting, tech is obviously playing a major role in financial markets. That should not be a massive surprise when we look at the way people now live. Technology has grown rapidly over recent years to become central to our lives. From how we keep in touch with friends on social media or Facetime, to how AI helps us to shop – tech is the thing that make society go round these days.
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It is not just our personal lives that tech has impacted for the better. The global business world relies on ultra-fast internet connections, e-commerce solutions and unified telecoms solutions to operate. That is why stock in tech companies has become hot property for potential investors.
Why invest in the tech sector?
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If you have some spare cash to invest, then you should consider buying stocks in tech-based companies. Stocks have always been the go-to investment for most people and can give a great return if you get your timing right.
But what factors point towards tech investment being wise?
It is in robust health –
2017 was a great year for tech stocks with many seeing impressive growth and the whole sector being ahead in countries like the USA by around 4%. Although there have been some recent bumps in 2018, it is still a hot sector to invest in and one that many think will continue to climb in the future. By investing in a sector that is experiencing good health and is seeing decent returns for investors you are doing what you can to lower your overall risk.
It can make you money –
This may sound a very basic point but the performance of tech stocks during the last few years shows it can make money for investors. That after all is the main purpose of investing money into stocks. By going with the best tech stocks with a decent history of returns you stand to make a good profit on any capital that you do invest.
Technology is not going anywhere –
As noted above, technology has grown over time to be crucial to the business world and our personal lives. That will increase as we move forward and new tech is developed by innovative companies. From the internet of things to voice control and advanced new smartphones, it would seem sensible to believe that the tech sector will not experience a serious prolonged downturn anytime soon.
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Tech companies are not hard to grasp –
One thing that continues to put many off investing in the tech sector is a feeling that they cannot possibly understand the companies to invest in. That is not true anymore and there are lots of tech companies like Amazon that have a perfectly clear business model to get your head around. The ease in which you can research the products that tech companies develop and how they are structured makes them easy to assess.
Potential for market disruption in other sectors –
Big tech organizations are great at is branching out into other sectors. So that when you invest in the right ones, you could see huge returns due to their dominance of other sectors as well as tech. Take Amazon, that has its fingers in so many pies, from music streaming, grocery deliveries and retail clothing.
Mature tech companies can offer certain returns –
Of course, certain returns have to be taken with a pinch of salt when it comes to any kind of investment! However, the facts remain that investing in the tech sector can give you access to massive companies like IBM that is well-established. This is great as an investor because you get to ride the tech wave but with less volatility than newer start-ups deliver. In real terms, this means more settled returns and regular dividends to reward tech investors.
Let a professional wealth management company help
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If you are new to investing as a whole, then it may be wise to seek professional advice from an independent wealth management company or financial advisor. This will help to clarify not only why tech stocks are a smart move, but which ones offer the best returns. From the respected team at Creative Planning to others in the US and beyond, getting this kind of help is a wise move.
Tech sector is a smart investment
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All sectors on the stock market will have corrections and bumps but this does not mean they should be ignored. While the tech sector has seen some of these recently, this is actually good news for investors. It not only allows the sector to reset for a new climb upward but also allows you to pick up some decent shares in strong companies at favorable prices. If you are looking for stocks to pick up that have generally seen solid returns each year for a while now, tech is hard to beat.