Technology Investment – What You Need to Know to Profit by Investing in Technology

With the stock market on a crazy roller coaster this last year or so in the wake of the global financial crisis, investors are looking for sectors where they can make the most money on their investment; and, recover what money they have lost. I think a good argument can be made that technology investment will be one of the most promising sectors to be in for quite some time to come.Whether you are referring to green technology or the HITECH legislation intent on uploading medical records into computing “clouds” or nanotechnology, most experts agree that the future is quite bright in this area.Contrast that with non technology investment in such areas as has heavy industry or even Detroit auto manufacture and I think you’ll find that maximum profit potential lies with technology.But how does one go about finding specific stocks or funds to invest in to take advantage of these technological breakthroughs without losing significant portions of the capital on stocks that fail to deliver or simply fall behind in their particular industry?The most money can be made in areas that are volatile; but that volatility works both ways and can easily produce negative returns on a large scale as well. It really takes an expert to be able to sort through all the information available on companies and the advanced sciences they employ.This need for high expertise to sort out the winners from the losers is what drives most investors to seek out a technology mutual fund or a technology newsletter with experts who have the time and competency to do all the research necessary.There are advantages and disadvantages to investing in a mutual fund and one of the disadvantages is a fund has to invest in more stocks than what they really would like to be involved with simply because of the large volume of money that is thrown their way and the small pool of companies with potential.Quite often a technology investment is best placed in a very small capitalization company that is too small to be capable of producing a large return for a mutual fund. An individual investor on the other hand can take a sizable position in relative terms to profit handsomely if that company delivers on what the market expects of them and rewards them with a higher share price.This tips the scale towards the technology newsletter as the go to source for the expertise to determine what companies should be the recipient of your capital and which ones should not. One would do well to look at the credentials of the individual researcher employed by the research firm in order to determine if they will be a good source of information.I also believe track records should be examined, although sometimes those can be somewhat difficult to verify and ascertain to insure that the figures you see resemble real-life experience.