As the pace of innovation quickens each year, the technology sector becomes increasingly appealing to investors. But how do you choose the best of the best? ETFs can help alleviate some of the risks of single-company investing.
The technology sector is booming on the news of two big names in the industry:
- Intel (NASDAQ:INTC): Intel Corp. raised its third-quarter revenue forecast above Wall Street’s expectations Friday, based on strong chip demand. This is giving a good indicator that the business is growing and improving, reports Barbara Ortutay for Associated Press. Intels’ shares were up 5% as of morning trading.
- Dell (DELL): The personal computer industry is healthy, as Dell is posting decent second quarter results. Profit fell 23% and sales fell 22% in the May-July period. The results beat Wall Street’s forecasts, however, sending the shares up more than 6%, reports Jordan Robertson for Associated Press.
If you bought shares in Apple (NASDAQ:AAPL) or Microsoft (NASDAQ:MSFT) in the early days, you were handsomely rewarded for your choice. However, what are the chances that most investors would pick one company in a sector of hundreds and have it pay off so well? ETFs can give investors a safe and cost-effective method to invest and play the sector as technology rises higher, says Ron Rowland for The Market Oracle.
With tech ETFs, you don’t have to choose just one or two companies, and you can get broad exposure at a low cost.
- Select Sector SPDR (NYSEARCA:XLK): up 32.4% year-to-date
- iShares Dow Jones U.S. Technology (NYSEARCA:IYW): up 41.8% year-to-date
- iShares S&P North American Tech Software (BATS:IGV): up 31.7% year-to-date