As tech products come down in price, investors need to get a lot pickier
The chart below graphically presents the dilemma you face when it comes to investing in tech. Depicting the role information technology has played in the economy over the past eight years, it has two separate lines. As you can see, one line is virtually flat—in fact, it is down a bit from its high point in 2000. The second line, though, rises steeply.
The flat line shows the dollar value of tech in the economy. The uptrended line reflects the actual physical presence of tech in the economy—for instance, the number of semiconductors in use. The explanation for why the two lines don’t look the same is simple: we’re using more tech, but prices have been coming down.
This, in a nutshell, is why the technology arena is both compelling and tricky for investors. The rising demand for tech products creates an indisputable opportunity.
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