Is “technology” still an investment category?

Cast your mind back two or three decades and investing in technology was similar to choosing a category such as retail or oil and gas. The “technology” label covered anything that needed computers for its business and profitability.

Within that group you might have found Microsoft, Yahoo! or a fledgling Amazon that had been founded in 1994. They were all influencing the way we lived our lives, moving us online and gradually rendering obsolete some of the more traditional ways of doing things.

Investment managers offered technology funds that focused on companies that fell under this banner. Many recorded massive rises before eventually succumbing to what was dubbed the ‘dot-com bubble’ and sinking without trace.

Others persevered, tweaking their businesses to make themselves important players, as an online presence became indispensable for companies seeking to offer sales and services to a broadening global market.

Gradually, the world moved away from the idea that using technology to reach customers was something new. Companies realised that the use of technology was no longer an option – it had become essential.

Life in the 21st Century revolves around 24-hour availability of retailers, banks, travel companies and much more. Technology is no longer a separate category of our lives – it’s an integral part. That’s also true of technology investing. Funds no longer hold shares in technology companies, they invest in businesses that happen to use technology.

For advice on portfolio management in Shropshire, perhaps covering some of these companies, give us a call.


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