technology is now an indispensable part of our everyday life and accompanies us in almost all areas of life – including the money plant. Many of the largest and on the stock exchange most actively traded companies are IT giants. However, it is not so long ago, when the “Dotcom bubble” has led to the beginning of the Millennium for a shock in the international capital markets. High profit expectations of analysts, who hopes to sharply rising stock prices, fueled, fuelled a Boom in technology companies. But when it became clear that the high profit expectations were not met, was completed the rise of the young, emerging Internet company abruptly – a downward spiral was created. The U.S. benchmark index, the S&P 500 lost within two years, around half of companies in the technology-based Index, the NASDAQ lost during the same period, around three-quarters of their market value. Investments in Tech companies are just pure speculation? Or you can open the steady technological progress interesting long-term investment opportunities? The Person
Dr. Ulrich Stephan, chief investment strategist for Private and corporate customers of Deutsche Bank.
in My opinion, the already high importance of the technology sector is expected to increase even more in the future and for long-term oriented and, accordingly, the risk to investors prepare be inescapable. You look back to the beginnings of the U.S. stock exchanges nearly 140 years, the first U.S. stock index, overall, not a great selection, even technology values play no role. As the Dow Jones Railroad Average Index on 3. July 1884 was published for the first time in the Customers‘ Afternoon Letter, a precursor to the Wall Street journal, it had only eleven companies: A provider of financial services and ten transport firms, including nine rail lines.
US: A quarter is accounted for by high-technology
In the following decades, the transport industry lost more and more their supremacy. In particular, the raw materials and the consumer discretionary sector caught up in terms of market capitalization significantly. Further turmoil followed with the Great Depression in the 1930s, and about 60 years later, with the Dotcom bubble around the turn of the Millennium, as Technology stocks gained by often fundamentally established profit and sales expectations massively. The Bursting of the bubble ended but only for a short time the rise of the technology industry: Today, the sector represents almost a quarter of the total market capitalization of the US benchmark index, the S&P 500 . By far the health consequences and financial companies 14.1 and, respectively, 12.8 percent. The smallest utilities (3.3 per cent), basic materials (2.6 percent) and at the beginning of the US-American stock market history is still dominating the transport sector with 1.9 percent are weighted. The trading system of SSE takes the emotions out of the game. Now with a clear strategy to create! (Partner quote) Here is a 30-day free trial!
The continued rise of the technology sector is no accident. Unlike the turn of the Millennium, since the financial crisis of 2007/2008, have achieved share price gains on a lasting basis: 80 percent of the rate increases are due thereafter on the profit growth of the company and not on an expansion of the reviews. In addition, the US-American tech companies have the highest and most stable profit margins at all. One reason for this is the often the easy scalability of its business model, that is: you can grow your business with relatively little capital input. For example, if a Social Media provider is increasing the number of its users, it must invest “only” in more server capacity. An industry wants to expand its production, are, in General, a high level of investment in new machinery due. The continuing demand for new digital services is expected to drive the earnings of the tech companies and their share prices in the future.
Strong increase in the emerging markets
In the Emerging markets and the role of technology companies has risen in the past years also considerably. About ten years ago, dominated the stock markets in the emerging economies, energy economies and basic material values: In the broad emerging index MSCI Emerging Markets had a share of nearly 24 percent. Today, her weight is only at 15 percent, while the share of companies from the fields of technology, communication and cyclical consumer to, among other things, the major online dealers in the same period, from 25 to about 40 percent rose. Basic developments of the emerging economies reflects economies example: The countries want to become less dependent on exports of raw materials and middle class consumption and hunger to grow. Deutsche Bank MSCI Emerging Markets
For risk-tolerant investors with an interest in technology investments seem to be primarily the stock markets in the United States, as well as in the emerging countries – particularly in Asia – is interesting. Europe is the only major investment region, in which the weight of the technology sector in the past 20 years has changed: in the Europe-wide equity index, the Stoxx 600 from Tech companies, only 5.6 percent in 2002 to 4.5 percent.
Overall, should benefit the tech corporations of the world continue the ongoing digitalization of our economy and of our everyday life – as well as from the increasing importance of sustainability: New technologies, for example, can contribute to a more efficient, resource-efficient production or in the area of smart electricity grids have an important role to play. As a “safe haven”, like many an Investor sees, for example, of Gold, I would not call a Tech Investment, but a broad technology investment, in my opinion, for long-term investors can form an interesting depot part
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