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The pandemic has affected investment markets across the globe. The global investment landscape started slowing down well before the pandemic. All three types of investments i.e., Corporate M&A, greenfield foreign direct investments (FDI), and Private Equity investments (PE) saw annual growth of 2% only. Business investment commitments in Singapore also dropped as much as 31% in 2021.

As an investor, the situation may look very bleak. It is natural for investors to be wary of expanding their investment portfolios and moving more towards pulling out existing investments. Experts suggest that pulling out investments even in these volatile situations isn’t the right solution. The way to navigate this uncertainty is to invest in stable companies with patterns that suggest good and non-volatile growth with a steady income.

Why Are Growing Tech Companies A Good Investment?

So, if investments are so unpredictable at the moment, where should investors put their money? Statistics indicate that the tech sector is dominating the equity markets with giants such as Google, Microsoft, and Apple on top of the growth charts globally. As the trend of digital transformation takes further hold, this trend will strengthen further.

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Investing in these tech companies is a viable option as compared to deciding to pull investments out of your portfolio.

Rising Trend of Digital Transformation

The pandemic showed the world that it wasn’t ready for this kind of situation, and it certainly wasn’t ready for the shift in working modes. Almost every company realised that they should have had remote working protocols in place in order to survive these kinds of circumstances.

Companies that couldn’t adapt to this change suffered, and several had to close shop. As the pandemic subsided, the need for digitisation grew and will continue to grow as organisations rely more on digital forms of communication and look to make their teams leaner and more efficient. Business sectors such as machine learning, SaaS, A.I., and cybersecurity will see exponential growth and become potentially high-investment sectors.

Tech Sector’s Future Is Bright and Growth Driven

Ernst & Young notes that the pandemic has shifted people’s lifestyles. People are now more tech-savvy, and they rely heavily on technology in their day-to-day lives such as the use of interconnected devices in different areas like security, health, food, etc.

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This major lifestyle shift will promote the growth of the tech sector and market. It will contribute to its stability and viability for investments. Brands will continue to make efforts to invest their time and money into digital tech to stay up-to-date and relevant for their consumers.

Rely on Research and Professional Advice Before Investing

Investment decisions should be backed by trends and data. Investing money is a calculated decision and should be taken after proper research and professional advice are received.

AllianceBernstein is a global investment management and research firm that keeps a close eye on these global trends. They operate with offices across the globe and offer their client sound advice based on real numbers and trends.

AB has its own methods focusing on three main factors of stability, quality, and price when they determine the best companies for its clients to invest in. They evaluate companies based on their stable performance and growth patterns and reasonable pricing. AB too suggests that the best route to navigating a volatile market at the present is to invest in the resilient and growing tech sector.

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This volatile market may encourage many investors in Singapore and beyond to pull out their investments and lighten their portfolios. However, this is not a sound decision in the long run. The key to surviving today’s unpredictable markets is to invest in companies that show promise through a stable growth pattern and diversifying portfolios.

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