Seven rules for tech investing
The overall stock market may have recovered from the Great Recession, but the tech sector has never fully recovered from the dot-com bust in the early 2000s. Here are seven rules for investing in high-tech companies while avoiding wild speculation:
2. Look for a large, locked-in user base
These companies benefit from substantial recurring revenue from enterprise software or long-term contracts for information-technology services or both, which often cost users a lot to switch out of.
"Think of Microsoft and Oracle," says Mr. Frederick. "They are steady. Corporations are going to continue to use their software."