Buy and hold still works no matter what you might hear from today’s pundits. The current investment community would rather you make frequent trades but there is nothing wrong with buying and holding as it is a strategy that has been proven to work. But in today’s environment, investors in all industries must be vigilant to make sure their companies are not disrupted by technology.
Remember Nokia? How about Blockbuster? Or how about Polaroid? Those are just a few real examples of companies that were on top of their respected technology sectors only to fall hard. Technology can disrupt a whole lot of things and investors must now be extra vigilant not only about their tech stocks but their stocks from other industries that might possibly be disrupted. Just like what happened to Borders.
It is true that technology investing might be more difficult than picking stocks from other industries. Cigarette companies, toilet paper companies, household cleaning supply companies, food companies, and utility companies have been around forever with not much to challenge them in terms of up an coming competition. Its unlikely that those types of companies have to worry too much about suddenly being out of business because of some new technological breakthrough.
But any company in technology (and that is a very wide brush), needs to be concerned and work overtime to stay ahead of the pack. This goes for the Microsofts, Google’s and Apple’s of the world as well as any other company in the space no matter how big or small it is. Technology is so fast moving that no matter who you are or how big you are, blinking might lead to being behind the eight ball.
Sometimes its hard to believe how rapid technological advances are coming in the 21st century. The hot topic of the year so far is that AI is going to be so big that it could also signal the end of humans. Really? The simple truth is though, that no one knows how AI is going to change our lives. Or virtual reality either. They may be transformative and change everything or they may end up being nothing more than a fizzle as 3D printing has been so far. One thing is for sure though, new technologies are coming at us in high speed now and investors must pay attention to the news and the stocks they own. All of them, not just technology stocks.