Stock Market Basics: How to Select the Best Tech Stocks in 2020

Picking the Best Tech Stocks as “4IR” Takes Off

The steam engine, electricity, the Internet. Do you see the common denominator? All three are technological innovations, and all three respectively sparked the first three industrial revolutions.

We’re now witnessing the “Fourth Industrial Revolution” (4IR), and technology has once again laid the groundwork. The tech sector boasts some of the most lucrative investments of our time. So naturally, everybody is out looking for the best tech stocks.

There’s no doubt that tech is the “alpha dog” of all sectors. That’s because this is the only sector that powers virtually every other industry, big or small. Yes, new technologies have popped up in retail, healthcare, automotive, utilities, industrials—you name it!

2020 is going to be another exciting year for tech stocks as companies look for ways to use technology to become more innovative, efficient, agile, and competitive.

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Why Invest in Technology Companies?

My dear friends, as I just mentioned, we are in the era of the 4IR. All the next-generation technologies you keep hearing about, like cloud computing, the Internet of Things (IoT), artificial intelligence (AI), autonomous vehicles, implantable nanochips, and so forth are gifts of the 4IR.

Together, they are revolutionizing almost all business sectors, not just the tech sector. All the proof you need is in the following chart:

Chart courtesy of StockCharts.com

The above chart shows how the tech sector, as represented by the iShares Dow Jones US Technology ETF (NYSEARCA:IYW) (in green) performed against the S&P 500 index (in purple) over a three-year period.

I didn’t cherry pick the good parts. That’s clear because I included 2018, which was a very volatile year for stocks. In fact, 2018 was the worst year for stocks in a decade, and it included the worst December on Wall Street

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