The tech sector is enormous. When you talk about “tech stocks,” companies like Microsoft, Apple, and maybe even Netflix probably spring to mind. But the tech sector is much more than consumer goods.
When you talk about tech, you’re broadly referring to an industry comprised of sectors like the following.
In short, almost any business that engages in the research, manufacture, maintenance, repair, or distribution of physical electronics (hardware) or codes and platforms (software) may fall under the umbrella of “tech.” And this means that picky investors have a plethora of options from which to choose.
When it comes to investing in tech, you can get started in a few ways. The most obvious is to buy individual shares via a broker or online investment platform, such as Robinhood, Fidelity Go, Acorns, or SoFi Invest, among others. Traditional stockbrokers also offer online platforms now, such as TD Ameritrade and Charles Schwab.
Investing in stock ETFs is another increasingly popular option, as it allows you to spread your risk and hold a few more securities in one go. Plus, you typically need less starting capital to invest – tech shares often price in triple and quadruple digits, whereas you can invest smaller dollar amounts into an ETF.
Tech stocks are known for attracting investors of all stripes, from novices to the highly experienced. The basic premise is simple. Tech companies offer newness, excitement, and innovation that other industries simply can’t match. And as they look to the future with new technologies and platforms, their stocks tend to charge upward in the market (at least for a time).
But it’s not just new inventions and big ideas that draw investors. Investing in tech also gives individuals a chance to invest in brands that play a major role in their lives. (Who among us doesn’t own a computer, smartphone, or at least a streaming media account?)
At the same time, tech stocks offer unique opportunities for growth, income, and value strategies. In the same share. For instance, investing in a mature tech company like Apple will not only generate dividends. It'll also likely lead to both short- and long-term growth. And for those seeking greater bursts of short-term growth, there's an ever-expanding field of younger, more exciting capital ventures (at higher risk).
Some investors also like to invest in technology because they’re not just investing in technology. Take Tesla, for instance. While Elon Musk’s brainchild is not categorized as tech, it relies on fast-paced innovation to differentiate its vehicles, batteries, and solar solutions. Or Netflix, the streaming media giant that has sprawled leisurely into the production space to feed content into its platform. And then, of course, you have Amazon. An enormous online retailer, forward-thinking technology engineer, and cloud hosting service in one.
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