The tech industry is by no means limited to big players; there are also tech startups, website and software developers, etc. From hardware to software, the tech industry is just ripe with opportunity. However, most stock investors would agree that investing in it is risky business – since things can literally change overnight in the world of technology, a company can vanish at the snap of a finger.
To determine whether this is something you want to be dabbling in or not, let’s take an in-depth look at the subject and examine everything you need to know about investing in technology stocks in 2019.
The technology industry offers a myriad of areas you could be investing in
Don’t limit your thinking to TVs and computers. Modern technology like blockchain, for example, is shaping the world we live in. This is the exact framework modern cryptocurrencies like Bitcoin were built upon. While some view it as an investment and others merely as another payment method, the way Bitcoin has shaped the world is simply undeniable. The beauty of it is being independent of a centralized financial intermediary and the having the anonymity of transactions pretty much guaranteed, all of which makes investing in blockchain-related stocks worth considering.
Then we have the IoT devices. Think smart homes (voice-commands, automated temperature regulation, metrics) and modern industry-tracking solutions (sensors, reporting, automated door control). In other words, in today’s world, everything is connected to the internet all the time. As the IoT sector grows, the investment opportunities grow with it.
Self-driving vehicles is another major investment opportunity. Although these aren’t quite legal yet until the technical difficulties are figured out, soon, we’ll see cars driving around completely without the need for human intervention. Can you imagine that? Major auto manufacturers like Tesla are investing a lot of funds into perfecting the technology, and now is an excellent time to get in as an investor.
Last but not least, we have the cybersecurity sector. People are always afraid of having their data hacked or stolen, so cybersecurity solutions that target the handheld and desktop devices will always be in demand. If you have valuable insights into how various antivirus companies operate and make their money, you could be setting yourself up for some nice profits by leveraging that knowledge.
What metrics should you pay attention to?
When investing in tech stocks, you should look at how innovative the company is and whether things look promising for the future or not. Even big players like Apple and Microsoft need to put a great effort into continuously attracting new customers. But even that is not enough – they need to come up with a smart monetization plan as well. Microsoft, for example, has moved its Office suite from being a licensed product to a service that requires a monthly subscription. This guarantees them a steady stream of income from the subscribers. As a stockholder, knowing that the business you’re investing it makes money on a regular basis is good news.
Of course, traditional metrics such as the overall revenue, profit, sales, and growth should play a major role in your decision as well. Technology stocks are known to fluctuate in value, which is a phenomenon that affects even the big names. Therefore, purchasing them is not for the faint of heart. Sometimes, however, high risk means high reward… so whenever there’s a risk of losing a lot, there is also an opportunity to gain a whole lot more.
Is investing in technology stocks suitable for beginners?
First of all, it’s hard to define who a beginner is, as the threshold may vary depending on who you ask. But the fact of the matter is that beginning, as well as experienced investors, are jumping on board on a daily basis, and their numbers are not to be underestimated. You don’t really need to be a master investor to recognize an innovative company’s potential, and this can often be enough to make an investment decision in a confident manner.
Bear in mind, however, that technology stocks are known to be a high-risk, high-reward type of deal. Therefore, some caution is in order, but also some speculation. If you believe a tech startup has a bright future ahead of it, then there’s nothing wrong with taking the plunge and investing in it. If, on the other hand, you’re more conservative and would like to reduce the risk as much as possible, sticking to big names like Apple, Google, and Microsoft is a viable strategy. Speaking of which…
What are the top technology stocks to consider purchasing in 2019?
Tesla (TSLA) is your go-to destination for everything self-driving vehicle-related. Apart from that, they’re also known for developing solar-powered solutions.
IBM (IBM,) the company that used to be known for its home computing solutions, is now branching out to other areas – most notably, AI and data farms. As time goes on, the company is planning to pave its way into other markets such as automated driving and machine learning.
Apple (AAPL) – this company has gained quite a foothold in the smartphone industry, which has taken the world by storm. Nowadays, smartphones are becoming increasingly more popular, and people like to replace their iPhones every year or two, so consistent profits are pretty much guaranteed.
Microsoft (MSFT,) even though its famous Windows operating system is less commonly used due to smartphones having almost the same capabilities as modern desktop computers, is still in the game, and the tech giant isn’t going anywhere anytime soon.
Intel (INTC) is still trying to come up with ways to create even smaller and more efficient hardware components. As an investor, you never know when the next breakthrough is going to happen, and if you place your bets at just the right time, you can easily net a hefty profit.
So there we have it! 2019 looks like a promising year, and there are many technological innovations just waiting to happen. As an astute investor, the tech industry is laden with opportunities you can seize – if you can stomach a little bit or risk, that is. In the end, purchasing stocks have a lot to do with predictions and calculations, but the final decision also involves listening to your gut feeling.