Investing In Technology Stocks ? Is Now the Right Time?
For quite some time now investing in technology stocks has been considered as high risk, thanks in large to the time when the dot-com bubble burst in the late 90?s. Back then only a couple of companies had a solid business plan and most of them back then did not really know how to monetize their online presence properly. But now, after the financial crisis and credit crunch that affected the whole business community, is it about time that investors start to have faith in the technology sector once again? If you are thinking about adding a couple of technology stocks to your portfolio then you should continue reading.
If you think about it, a lot of the companies that are in the technology sector are among those that have the lowest amount of debt, they have really robust balance sheets and they also offer good chances with regards to recurring income. Keep in mind that these are companies that are offering goods and services that a lot of people nowadays are buying; if today is not the perfect time to grab the opportunity of investing then when?
The big players in the technology stocks race, Apple and Intel, have beaten all profit expectations placing the both of them well ahead of their results from last year. Technology indexes have also been doing well these past few years, significantly rising up in the ranks. All these signs point to a positive outcome for tech companies in the next couple of years.
You will notice that tech companies these days are not the same as they were in the last decade; back then share prices rose up ?to expectations of growth that turned out to be false. With the tech companies of today, it is highly expected that technology stocks will be able to outperform all the others in the US stock market in the upcoming years.
And since tech companies are very cash-generative, this means that their dividends will also be on the rise. Paying dividends is quite a new thing among tech companies, but it is one that is taking a hold fast. Some of the big companies that pay dividends these days are Microsoft, Intel, and IBM.
People these days are dependent upon their computers and since the average lifespan of a personal computer is approximately five years this provides hardware and software companies a replacement cycle that is very advantageous for them. And because new operating systems and gadgets are released in an almost annual basis, people will generally want to buy the latest offerings. This makes technology stocks a veritable investment option.
Sooner or later the economy will bounce back and get back on its feet, and when it does you can be sure that the technology sector will be at the helm, leading the pack. It is very important to give your investment portfolio a bit of variety, so why not add some technology stocks in there? Just to give balance to the entire mix. If you are still apprehensive about investing in tech stocks, you can still play it safe by investing no more than 5% in these kinds of stock options.
Tech stocks are definitely on the rise once again and it would be foolish for any investor to not take a chance on them. Remember that tech companies are not like what they were 10 years before, unlike the other businesses, they actually overcame the financial crisis and came out stronger than ever. No longer are technology stocks a risky gamble, in fact many people think of them as sure, stable investments.
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Source: http://www.investorgoodies.com/investing-in-2012-technology-stocks-%E2%80%93-is-now-the-right-time/
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