Technology funds have performed splendidly over the past year, but caution might be best for investors anxious to rush back into the techies that burned them a few years back, according to a recent Reuters report.
With the tech-heavy Nasdaq Composite Index rising 43.6% in less than a year, it may be tempting for many investors to hop aboard the technology-buying spree. But the lessons of the late 1990s should serve as a reminder that nothing is a sure thing.
"Investors found out that its a mistake to put too much money into one hot sector," financial planner Linda Belom told Clint Willis, a freelance writer for Reuters. "Theyve had to relearn the rules of investing."
Investors should really do their homework before purchasing technology funds considering that many of the currently successful technology companies are challenging larger corporations with tons more firepower. Investing between 10% and 25% is the best game plan, according to the report, because investors wont blow themselves out of the water if something catastrophic happens to the industry again.
