Have It Both Ways With Tech ETFs
On one side of the aisle, you have Apple , Samsung and all the companies that support them, contemplating a world where everyone has a smartphone, tablet or some cutting-edge new device we don’t yet realize we want.
On the other side, you’ve got tech monoliths likeIBMand Intel , whose products aren’t sexy but remain vital to business clients and generate tons of cash.
Regardless of which side of the aisle you fall on, technology’sfuture appears bright.
Though tech stock valuations are not cheap, they remain reasonable compared to historical averages, according to iShares chief global investment strategist Russ Koesterich.
So, for those who want to play it sideways, the best strategy is to have it both ways.
SPDR Morgan Stanley Technology owns a mix of old and new tech names to stay well-positioned for the ups and down of an uncertain economy.
Techs also benefit from clean, mostly debt-free balance sheets. Firms' cash-flow power insulates them from a probable rise in interest rates over the next decade since they don’t need to borrow as much as other industries, says Koesterich.
Technology is positioned for a long-term pop in demand as developing nations build out their infrastructure and a huge middle class starts buying the latest gadgets.
ETFs covering the global tech sector like iShares S&P Global Technology Sector are a way to participate in this shift.