THE proliferation of digital capabilities such as web-based software and powerful smartphones has made technology adoption widespread with substantial productive gains.
Technology has thus become an on-going secular trend. Over the last decade, investors reaped steady stream of income growth by investing in the technology sector, particularly in areas such as innovative new products, services, and features.
Below are some tech industries that are worth paying attention to:
Consumer tech industry
Consumer tech stocks are more resilient compared to others as these products or services are part of our daily lives. For example, e-commerce, social media, smart phones, and electric vehicles are just some of the examples of how the landscape has been disrupted.
This is also known as “disruptive technology” where innovation has significantly altered the way that consumers, industries or businesses operate.
The growth in this industry is fuelled by the fact that countries touted as emerging economies are adopting these products and services rapidly, thus making companies such as Google, Facebook, Tesla, Apple and many more the biggest winning stocks of all time.
Digital services industry
More and more companies and institutions are using technologies such as cloud computing, software as a service (SAAS)/on-demand software, artificial intelligence (AI), Big Data, and Internet of Things (IOT) to drive productivity during an incredibly challenging time.
Whether you are a provider or a user of services, the need for these services is ever increasing.
Digital infrastructure industry
As the speed and number of operations increase, infrastructure becomes increasingly important in the digital eco-system. Semiconductors, 5G, data storage centres, towers and reliable power supply are all critical in meeting consumer and corporate needs.
Investing in these companies can enhance your overall portfolio returns.
Fintech industry
It has been some years since electronic and contactless payment activity becomes a crucial building block in the banking and financial world. Nevertheless, the COVID-19 pandemic has sped up the adoption rate of a cashless world.
Fintech is being adopted in emerging markets at an increasing rate. Platforms are proliferating and investment activities are on the rise. Governments and regulators from a variety of jurisdictions are seeking to create suitable fintech ecosystems to keep up with the rapid growth in this area.
This provides stability for this industry which encourages more investment into this space.
Deep tech
Finally, there is a new wave that we refer to as deep tech which is still in its infancy but is projected to have a significant influence. Shunning deep tech can be the riskiest decision for the same reason that avoiding digital investments in the early 2000s was unwise.
Recall that many investors were wary of digital businesses at the time with bursting of the dotcom bubble in 2000 making them even more so. But it was around that point that several of today’s most powerful digital businesses really took off.
Those investors who got started early, persevered, created their networks, and took the time to learn about the sector fared the best. – March 6, 2022
Pauline Yong, CFTe, CFP is a certified member and licensed financial planner with Phillip Wealth Planners Sdn Bhd.
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.
