Updated January 2023
Technology — we love it, you love it, the entire world loves it.
Our lives are inundated with all manner of gadgets and gizmos. From ‘smart’ products that simplify your day-to-day life to dense software that keeps billion-dollar corporations running, tech is everywhere.
The only reason you can read these words right now is because of tech. Whether it’s on your phone, tablet, or computer, you’re here because of the power of technology.
Even the staunchest of technophobes can’t completely avoid the stuff. Most of them at least have a mobile phone nowadays…
This begs the question: Who is making all this stuff, and, more importantly, how can you make money?
How can I get started investing in technology stocks?
Like most major industries, your best bet to make money on tech is through publicly traded stocks. And these stocks mean you’ve bought a small portion of a company.
When it comes to tech stocks, we’re talking about corporations in the business of technology, Companies that make and sell tech hardware, software, or even services.
These are companies that are often on the cutting edge. Companies looking for new and exciting products and services that could transform our modern world.
In fact, you’re probably already quite familiar with some of the bigger names out there.
Stocks like Alphabet Inc [NASDAQ:GOOGL] (Google’s parent company), Meta Platforms Inc ][NASDAQ:META] (owner of Facebook, Instagram, and WhatsApp), Amazon.com, Inc [NASDAQ:AMZN], and Apple Inc [NASDAQ:AAPL], are four of the biggest companies on the planet. And all of them are tech companies.
Each one of these companies has made billions of dollars thanks to revolutionary technology. And shareholders, the people who own stock in the companies, have made a pretty penny themselves.
For example, if you invested $1,000 in each of these companies in 2016, you’d have made $14,510 by 2021! That would’ve been an average return of 362% across all four stocks, making them some of the best tech stocks in history.
Today, you can still invest in these companies but don’t expect to see those kinds of results.
These stocks have had their heyday. But the broader tech sector hasn’t!
The future of technology is growing more exciting day by day. New ideas, innovations, and opportunities are around every corner. You just have to know where to look…
The tremendous gains aren’t at the top end of the market. You need to search for companies pushing the envelope, companies that could become the next ‘titan’.
How to find the right tech investments
What you need to understand about tech stocks and technology ETFs is that they’re a different kind of beast.
‘Tech’ itself is an incredibly broad term. You could be dealing with a chipmaker from China, a social media company in the UK, or even an artificial intelligence (AI) developer in Australia.
There is no definitive limitation on what ‘tech’ can be or where it can come from. Generally, the mass media will just lump anything remotely digital into the tech category, but there’s so much more to it than that.
You’ve got to follow the trends to see where tech is headed next. Trends that the mainstream doesn’t have time for.
If you want to know tech, then you’ve got to be able to speak tech. And it’s easier to learn than you might think. You’ve just got to have a willingness to learn.
Your best bet is to just start Googling. Give that search button a run for its money, and start immersing yourself in everything tech-related.
You’ll find information on stocks and broader market trends, including all manner of tech-related news.
Where to buy tech stocks
Finally, you need to understand that tech is global. Sure, the big names are mainly located in the US. But you can find tech stocks everywhere.
Locally, the Australian Securities Exchange (ASX) is home to hundreds of tech companies. Stocks like Altium [ASX:ALU] and Appen [ASX:APX], were once some of the best and brightest.
Altium generated a staggering 1,310% stock price increase from 2016–2021. And Appen investors were enjoying similar highs, with early investors finding themselves pocketing a mammoth 1,495% between late 2018 and early 2021.
These can be the kind of tech stock gains you can find in the market. But while some of these players may be billion-dollar companies today, that wasn’t always the case.
Again, using Altium and Appen as examples, these started out as small companies with diminutive market caps. And it was their small beginnings that made them profitable later on.
See, smaller tech stocks generally have the most upside potential. Companies that could yield massive returns, sometimes in very short spaces of time.
Of course, finding and investing early in these companies comes with high risk. Get it wrong, and you could lose some or all of your investment.
You’ve just got to track them down, which is easier said than done but not impossible.
Is technology a good investment today?
There is no escaping the fact that 2022 was a tough year for leading company stocks like Apple. Other major players like Meta (which collapsed by 66%) and even Alphabet seem to be having an even harder time.
Even the US’s tech heroes, Microsoft Corp [NASDAQ:MSFT], NVDIA [NASDAQ:NVDA], and Tesla [NASDAQ:TSLA] fell between 25% and 45% in 2022.
And yet, development and competition in the tech sector are still in overdrive.
Companies worldwide are clamouring to pioneer a handful of major tech innovations. We’re talking breakthroughs like AI, driverless cars, blockchain, biohacking, and more.
In fact, the competition is so fierce to be ‘first’ that entire countries are being pitted against each other. It’s a massive race to a technological utopia that will revolutionise the world.
That race is neck and neck between just two main players: the US and China. Two countries where technology investments are booming.
In the US, everyone knows about Silicon Valley. The place where anyone worth their salt in the tech space is located. It’s a proverbial playground for developing some of the most revolutionary ideas of the past half-century.
But more recently, there is a new challenger from the East. China has fast become a tech powerhouse of its own.
They’re creating their own Silicon Valley. A space that is now a hotbed of tech investments that rivals the US.
It’s shaping up as the most exciting tech boom ever.
That’s just the start, though.
The next decade is going to be unlike anything we’ve ever seen in human history. The technology on the horizon will change the world like never before.
And if you’re savvy, you could benefit too.
And if you’re savvy, it could change your fortune in a big way, too. [openx slug=postx]
