Navigating the Risks and Opportunities of Investing in Technology: Insights from Wealth Management Professionals.

Investors’ considerations of price in technology investments

Investing in technology has become expensive, but wealth managers and investors can still access the opportunity while keeping valuation in mind. Dan Smith, senior equity analyst at Canaccord Genuity Wealth Management, suggests focusing on companies that facilitate artificial intelligence (AI) rather than pure AI companies due to more attractive valuations in that sector. Timing when to invest and when to exit, while maximizing returns, is a challenge for investors.

According to Storm Uru, who co-manages the Liontrust Global Technology fund, investing in technology is significant and just beginning. However, he is cautious about excessive valuations and sets target prices for the stocks he owns. If a stock exceeds the target price, he sells it unless the fundamental reason for owning the stock has improved. Smith also emphasizes the importance of considering valuation when investing in technology while being aware of potential exponential growth.

Investors can take a cautious approach by setting target prices for their investments and selling them if they exceed those prices unless there are fundamental reasons to keep them. Both experts believe that investing in companies benefiting from AI rather than being AI companies themselves is worth considering due to more attractive valuations. The potential for exponential growth should also be taken into account when making investment decisions.

Overall, investing in technology requires careful consideration of both valuation and potential growth opportunities. As an investor or wealth manager, it’s important to stay informed about emerging trends and technologies while keeping a balanced perspective on risk management strategies.

Sophia Reynolds

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