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Is it a good idea to invest in technology companies in today’s volatile market? Here’s what the trends and data say… –

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The pandemic has affected investment markets around the world. The global investment landscape began to slow long before the pandemic. All three types of investment i.e. corporate mergers and acquisitions, greenfield foreign direct investment (FDI) and private equity (PE) investment have seen year-on-year growth 2% growth only. Corporate investment commitments to Singapore also fell as much as 31% in 2021.

As an investor, the situation may seem very grim. It is natural for investors to be wary of expanding their investment portfolios and oriented more towards the withdrawal of existing investments. Experts suggest that withdrawing investments even in these volatile situations is not the right solution. The way to navigate this uncertainty is to invest in stable companies with models that suggest good, non-volatile growth with stable income.

Why are growing tech companies a good investment?

So if investments are so unpredictable right now, where should investors put their money? Statistics indicate that the technology sector is dominating the stock markets with giants such as Google, Microsoft and Apple topping the growth charts globally. As the trend of digital transformation takes hold, this trend will become even stronger.

Investing in these technology companies is a viable option compared to deciding to withdraw investments from your portfolio.

Rising trend of digital transformation

The pandemic showed the world that it was not ready for this kind of situation, and it was certainly not ready for the change in work patterns. Almost every company realized that they should have implemented remote work protocols to survive these kinds of circumstances.

Businesses that failed to adapt to this change suffered and many had to close up shop. As the pandemic waned, the need for digitization has grown and will continue to grow as organizations rely more on digital forms of communication and seek to make their teams leaner and more efficient. Business sectors such as machine learning, SaaS, AI and cybersecurity will grow exponentially and become potentially high-investment sectors.

The future of the tech sector is bright and focused on growth

Ernest and Young notes that the pandemic has changed people’s lifestyles. People are now more tech-savvy and highly dependent on technology in their daily lives like using interconnected devices in different fields like security, health, food, etc.

This major lifestyle change will drive the growth of the technology industry and market. It will contribute to its stability and viability for investments. Brands will continue to make efforts to invest their time and money in digital technology to stay up to date and relevant to their consumers.

Rely on research and professional advice before investing

Investment decisions should be supported by trends and data. Investing money is a calculated decision and should be made after proper research and professional advice.

AllianceBernstein is a global investment management and research firm that closely monitors these global trends. They operate with offices around the world and offer their clients sound advice based on real numbers and trends.

AB has its own methods focusing on three main factors of stability, quality and price when determining the best companies in which its clients can invest. It rates companies based on their stable performance, growth patterns, and reasonable pricing. AB also suggests that the best way to navigate today’s volatile market is to invest in the resilient and growing tech sector.

This volatile market may encourage many investors in Singapore and beyond to withdraw their investments and lighten their portfolios. However, this is not a good long-term decision. The key to surviving today’s unpredictable markets is to invest in promising companies through a stable growth model and diversified portfolios.

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