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Best industry to invest in: Three Tips

Dimitar Bogdanov
  • January 1st 2020, 23:57
  • Last Updated: January 2nd 2020, 22:01
  • Tech sector gained 43% in 2019
  • The trend is expected to continue in 2020 as well
  • Microsoft, Adobe and Cisco well-positioned to continue rallying

The reason we picked the tech industry as an advice to invest in shouldn’t surprise you. You needn’t be a tech-savvy person to understand that this sector offers so many different opportunities to make money. Moreover, the entire previous decade was characterized by the rapid rise of “Big Tech”.

As an industry that is at the forefront of innovation and at the center of digitalization, the Tech sector is primed to continue growing at a rapid pace. Stocks in this category contain manufacturers of computer hardware and computer software; electronics and technological service industry companies, as well as information technology providers and business data processing.

Technology sector market performance (Source:TradingView)
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The chart above shows the performance of the tech sector in 2019. The industry hit an all-time high in the last week of December, which signals that this sector is currently booming. The sector gained 43% in 2019, which is around 15% higher than the second-best performing industry.

So, which stocks should you consider buying? Here, we list the three potentially best-performing stocks in the coming weeks and months.

  • Microsoft is still one of the best tech stocks to buy in 2020, mainly thanks to its stable and profitable business diversification. For instance, one of its top performers today is Azure, Microsoft’s cloud-based product, which lags only behind Amazon’s AWS in the context of market share.  
  • Adobe is another tech giant that continues to attract the attention of investors. Similarly to Microsoft, Adobe has successfully transformed its business from an old-fashioned tech company to a business giant present in almost all areas of the tech industry. It offers a list of must-have software for professionals, and especially for those working in the field of education. Its sales continue to record great results, which translates into a fantastic performance of Adobe stock. 
  • CISCO finds itself on this list thanks to its range of products, which offer critical internet infrastructure. Furthermore, Cisco should be one of the many companies that is primed to benefit from the emerging 5G technology. Financially, the stock offers an above-average dividend yield, which will only grow once the 5G business starts to kick in properly.

Summary

As we mentioned previously, the tech sector has dominated the stock market in the previous decade. In another 10 years, tech companies are expected to play an even larger role in everyday life and markets than is the case today.

As the tech industry is highly interconnected, our advice is always to diversify your portfolio and limit the exposure to one branch. Hence, never put all of your eggs in one basket but rather put a few more eggs in a few select baskets.

About the author

Dimitar Bogdanov
Dimitar Bogdanov
I have been a journalist for Invezz since 2012 and am one of the oldest on the team. My focus is on cryptocurrencies as well as general equity markets, although my experience is broad overall.

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