Should you be investing your money In technology

Analysing trends carefully

 

Understanding which tech firms are in the ascendancy is an important part of sound investing. For example, Big Data - the huge trend in the enormous amounts of data being collected and used productively by organisations - has spawned several new companies providing data management services.

 

While their turnovers and growth year on year are often impressive, many are investing heavily in their infrastructure and their own growth so returns may not be very impressive at present. Given time they may well be, but it’s a prime example of analysing the overall picture rather than being seduced by headlining turnover figures.

 

Investing sensibly

 

Investment in technology needs a sensible strategy and not rash decisions. You’re not shopping for the latest shiny new gadget for your own benefit as a consumer, you are looking for a sound, well-performing investment. Gaining knowledge of the markets and taking heed of the advice of key sources is important, and investment methods that can help make the most of rises and falls in certain stocks such as spread betting are worth considering.

 

Related technology

 

While you may be intent on checking the stock values of household name tech companies like Apple, Google, Facebook and others, it’s worth thinking of investing in companies supplying to those involved in high growth technology.

 

For example, car tech is moving at a frantic pace as the race to driverless technology continues. The advances in self-driving capability means the demand for sensor technology is high and likely to increase. Car manufacturers buy this technology in, sometimes from companies with a reputation in other fields such as Sony.

 

The Japanese corporation - while themselves involved in sound and telecoms tech - is a major supplier of sensor technology to the motor industry. As a result, its stock is likely to rise as they enjoy growth driven by automotive technology advances.

 

So check who is supplying the equipment for industries involved in heavy technological growth.

 

Check established tech favourites for performance

 

Some companies have been at the forefront of technology, and performed well on the stock market, for some time but it’s important to keep your ‘eye on the ball’ if you own or are thinking of buying stock in a certain tech company.

 

For example, while Apple has been a firm stock favourite due to its astounding worldwide success for some time now, sales of its most popular product, the iPhone, slowed for the first time since its launch recently and the previously booming sales for the iPad have reduced.

 

While it would be alarmist to say the Californian tech giant is no longer a sound investment, its recent revenue reductions shows the value of keeping abreast of developments.

 

Winners and losers

 

While technology overall is a growth investment, there are winners and losers so the need for as much knowledge and analysis can’t be overstated.

 

For example, while Google and Yahoo both started in a similar way some 20 years ago, Google has developed and adapted more in the intervening years than Yahoo to become one of the world’s most valuable listed companies. Yahoo by contrast has tried various ‘rejuvenation’ attempts but remains a poor relation to its search engine-related competitor.

 

Do your research and diversify your investment to benefit from the money to be made in technology. Back the right horse – and not just the most famous firm or company you shop with - to make the most of the money you have available to invest.