Prices soared in early 2022 due to pandemic supply chain outages and cash-filled consumers' bank accounts. Telework seemed set to remain, and unemployment was near historic lows. For many, there was a real sense that the pandemic economic crisis was behind us. But not everyone was so optimistic, and it didn't take long for runaway inflation to become a major problem for markets and ordinary investors alike. But how is it now?

To answer this question, it is important to look at the current state of the technology sector and the factors that are driving its growth. One of the key factors driving growth in tech stocks in recent years is the growing reliance on technology in our daily lives.

As more and more people work from home, shop online and use digital services, technology companies have seen a surge in demand for their products and services. In addition, the pandemic has accelerated the adoption of new technologies, such as artificial intelligence and e-commerce, which are expected to drive the growth of the technology sector in the coming years.

Luis Strohmeier, a partner and wealth adviser at Octavia Wealth Advisors, says he still recommends big tech company stocks -- but not for investors with a short view. In the short term, these stocks could see a correction after their rise; anything can happen now, he says. But in the long run, “they're great places to store money.” If you want to invest in your future — five, ten or forty years ahead — then now is as never before a good time to buy shares in tech and other companies.

Maxim Manturov, head of investment advisory at Freedom Finance Europe, says that: “Consumer and enterprise technologies have become an integral part of people's lives, making them fundamentally different from the dot-com situation. And while demand for some services may decline in 2023, customers will continue to pay for products, keeping revenues at acceptable levels. Moreover, the Fed's (Federal Reserve) rate hike cycle is likely coming to an end as it focuses on reviving the economy after the Covid-19 pandemic. Given the dominant position of the technology sector in the indices of the US markets, the prospects of the technology sector take on importance. Companies that continue to show growth, particularly at low valuations, are best placed to navigate the current environment and deliver value to investors.

In 2023, it is important to stick to large-cap technology companies + those businesses that have a more defensive profile at the outset, such as companies that have strong management teams and have demonstrated the ability to increase customer spending given their advantages in terms of reach and scale. New efforts and work to increase value for existing customers are expected from large companies.

Moreover, the Federal Reserve's commitment to keeping interest rates low for the foreseeable future means that demand for technology stocks is likely to continue for years to come.

Despite the positive outlook for the technology sector, there are currently some risks to investing in technology stocks. One potential risk is the threat of increased regulation. As technology companies become more dominant in the economy, concerns are growing about their market power and the impact on society. This has led to more frequent calls for regulation of the tech sector, which could potentially limit the growth of these companies.

Another potential risk is the possibility of a market correction or recession. While the tech sector has been relatively resilient during the pandemic, a sudden change in market sentiment or an economic downturn could lead to a sharp drop in tech company stocks. Moreover, some technology companies are trading at high valuations, which could make them vulnerable to a correction should investor sentiment turn negative.

So is it too late to buy tech stocks? The answer is not unequivocal, as it depends on your investment goals and risk tolerance. If you're looking for a fast-growing investment with the potential for long-term returns, then investing in tech stocks could be a good option. However, you should be prepared for the possibility of volatility and downside risk and make sure that the valuation of the companies you invest in suits you.
If you are a more conservative investor or are worried about the risks involved
with investing in the technology sector, other investment options are available. For example, you might consider investing in more diversified funds or ETFs that include exposure to the technology sector as well as other sectors of the economy. This could help spread the risk and ensure a more balanced portfolio.
In conclusion, although the technology sector has seen impressive growth in recent years, there are risks and uncertainties that investors should be aware of. Investing in tech stocks can be a good option for those who don't mind risk, but it's important to do some research and make informed investment decisions. Deciding whether to invest in tech stocks ultimately depends on your individual investment goals and risk tolerance.

The author is a financial writer living in London, founder of Solvid and Pridicto.

Source: E15

https://www.e15.cz/nazory/prichazi-nejvhodnejsi-doba-na-investici-do-akcii - technological-societies-1396922

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