Having several reliable stocks that you can count on is critical when diversifying your portfolio and provides a hedge against losses that are the result of unforeseen market changes that affect more risky positions. Due to the rapidly evolving environment that exists in the technology sector, reliable tech stocks are far and few between. Five companies have secured strong footholds in the tech industry, however, and continue to grow steadily despite the rapid changes in competition and technology that must be weathered in order to stay afloat in the industry. These low risk stocks provide the a reasonable hedge against more high risk investments and provide potential growth at a lower chance of failure.
Google (GOOG) is a technology giant with its hands in numerous major revenue streams that the company has acquired over the years. It operates the largest search engine in the world and fields about 3 billion search queries each day. While the search engine provides Google with 80% of its revenue stream, it pulls income from its Google Chrome web browser, YouTube and its Android smartphone software. The behemoth consistently pulls in revenues of over $20 billion and made a net profit of $8.5 billion in 2010. Most importantly, Google stock tends to move up the majority of the time and rarely loses- making it a stock that is guaranteed to be worth in 10 years that it is currently.
International Business Machines (IBM) is one of the largest providers of systems integration services in the world and pulls 65% of its business from foreign clients. IBM develops and maintains hardware and software designed specifically for the streamlining of business networks to increase efficiency and productivity. With operations in 170 countries, this tech giant is here to stay and has seen its stock triple over the past ten years from $60 per share in 2002 to $180 at the end of 2011.
Cisco Systems (CSCO) is the leading provider of data network equipment and programming. With its entry into the newer video conferencing market along with web collaboration and data centers, the company has positioned itself for a steady climb in coming years. The past years haven't proven to be remarkable, but in the long term, this stock has never failed, making it a low risk investment that has serious potential to gain, with 2012 showing the possibility of being a breakout year.
Intel (INTC) has maintained prominence as the largest computer chipmaker in the world and has consistently held its own against emerging competitors such as Advances Micro Devices (AMD) and ARM (ARMH). Most importantly, Intel blazed the trail with x86 architecture design for microprocessors. Intel is another low risk stock that provides very chance of long term losses with the very real potential for significant gains.
Apple (AAPL) has broken the ceiling for the past five years with a meteoric rise from $97 per share in 2007 to $422 to start 2012. The popularity of the iPod, iPhone, iPad and possession of the largest music distribution service in the world give Apple a steady stream of residuals derived from repeat purchases of apps, services and music through numerous devices. There remains a level of uncertainty about new CEO Tim Cook and whether he can continue to lead the company in the absence of the Steve Jobs. Apple's current outlook remains positive, however, and the company will learn to adapt and survive without Steve Jobs. In particular, I think the opportunities with iTV and Apple's entrance in that market could look particularly interesting.
Diversifying your portfolio with these tech stocks will give you a firm base in the technology sector, which has received a reputation for its explosive nature on the market. In the midst of the chaos, these five stocks have proven to weather the storm and remain profitable. Google and Apple have shown the most growth over the past decade and are the most expensive to buy into of the group. Each of their histories has shown consistent and dependable growth, however, and if you have the means and the capital to take a position in either company, it will be certain to reward you in the long run.