A new study by investment management firm SAC Capital has concluded that investing in tech stocks can actually be a better investment than traditional bonds.
In fact, it estimates that investing $10,000 into tech stocks will yield an investment of $18,200 per year.
The firm says this figure is significantly lower than the typical $50,000 per year yield on a 10-year bond, and in fact, the average yield on bonds in the US is only 3.2% a year.
“If you’re an investor who wants to invest in technology, it’s a great place to start,” says Ben Schuman, managing director at SAC.
“The companies are performing exceptionally well.
The stock market has been soaring, and the technology industry is very well-positioned to capitalize on that.”
He adds: “We also found that investments in technology are not as risky as you might think.
It’s possible to have a low cost of capital and invest a lot of money, and a lot more of it is in technology than in most other sectors.”
Schuman says tech stocks are currently trading at a discount to the overall market, and SAC believes that trend is likely to continue.
The company estimates that the average annual return on tech stocks is 1.7%, but that returns will continue to rise as more companies adopt the technology that makes them money.
It also points out that the S&P 500 index is up nearly 10% over the last year, and that the technology sector has been doing very well.
Schuman adds that the tech industry’s growing popularity has led to a number of startups to raise money.
“I think a lot is going on in the industry that is creating a lot people that are going to want to invest,” he says.
“It’s been a very positive and exciting time to be an investor in tech.”
Here’s how the SAC study breaks down the tech sector’s performance over the past decade: SAC is offering a free one-year subscription to the study.
If you want to get a better sense of the performance of tech stocks, check out its full report.
For more on the tech space, check this out: “There’s been tremendous growth in the technology space over the years,” says Schuman.
“We think it’s been really successful, and we believe that the market will continue in that direction for the foreseeable future.”
Tech stocks are often seen as the next big thing, but they haven’t been quite as successful as they are in the past.
This year’s tech boom has been so good that investors are willing to spend more money than ever before.
In order to get the most out of the stock market, you need to understand what it’s all about.
If that sounds like you, here’s a few simple rules of thumb to help you make sense of this market.
Invest in the stocks that are growing The average amount of money investors are spending on tech investments is actually higher than the average amount they are saving for retirement.
The average annual saving for a typical retiree in the S+P 500 is $9,200, and you can add in other investments like cash and investments in bonds and mutual funds.
For the SAA, the median investor is saving about $16,000 a year, while the average employee is saving around $10.70 per month.
This makes tech stocks relatively attractive, because you are saving more, but also less.
Invest for a longer term outlook Investing in tech shares can provide a much better return on your investment, because it puts your money in a company that has a future.
This isn’t to say that it will grow the stock price or generate a greater return.
The SAA is also investing in more traditional bonds, and it says that while it will eventually want to buy back its own stock, it isn’t likely to do so for several years.
“As long as we are able to maintain our long-term strategy, we will continue with our investment strategy,” says Shuman.
You can read the full report here.
Investing with SAC’s free quarterly Tech Investment Report is now available for a $99.99 subscription.
The study is free to use, but you can opt to buy the report for $5.99 per year to continue to receive quarterly updates on the latest market news.
You’ll get access to the full list of SAA and SAA Plus ETFs, and this report also includes the SAAA’s top investment picks, the best investment ideas, and how to choose the right index fund.