Areas for investment in technology

Technology is a wide-ranging term: It has expanded far beyond what would have once been considered the typical tech stocks, including computer companies like Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), IBM (NYSE:IBM), and others. It’s not even fair to call any of these three brands computer companies anymore. They operate in a variety of other segments that are all part of the technology market, including but not limited to:

• Artificial intelligence (AI): This is where computers perform tasks that might have traditionally require a human brain. AI also encompasses  deep learning (where data scientists build computer models inspired by the structure and function of the human brain that essentially reproduces our ability to learn), and machine learning (a type of AI where computers learn without being specifically programmed to). Amazon’s Alexa might be the most famous AI, though IBM’s Watson has also achieved a lot of media attention.
• Smartphones: While Apple and Samsung lead this space, there are lots of secondary players making components, software, apps, and phones. “Smartphone” is sort of a catch-all name for handsets that can run apps, programs, and nearly anything else a computer might be able to do.
• Blockchain: While blockchain has gotten a lot of publicity because it’s the technology behind Bitcoin and other virtual currencies, it’s more than just an alternative payment method. Blockchain is “the digital, distributed, and decentralized ledger tethered to most cryptocurrencies that are responsible for recording all transactions without the need for a financial intermediary. In other words, it’s a transparent and immutable (i.e., unchanging) log of all transactions that don’t involve banks acting as a third party,” according to The Motley Fool’s Sean Williams.
• Self-driving technologies: Companies including technology leaders like Alphabet (NASDAQ:GOOGL) subsidiary Waymo, Tesla, and most major auto manufacturers are working on creating self-driving cars. In most places, that’s not even legal yet, but some driver-assist technology has already come to market, and it’s likely that self-driving cabs and even trucks will be in at least limited use reasonably soon.
• Computers and software: These are the companies that make the laptops, desktops, and tablets, and the software that runs them. This segment also includes component players like Intel (NASDAQ:INTC) and Advanced Micro Devices, which make the chips and processors that power computers, but also bigger well-known brands like Apple.
• The internet: Think of companies like Alphabet’s Google, Microsoft’s Bing and MSN, Twitter, and Verizon‘s Yahoo, along with companies like Yelp that offer purely digital products. Most of these players are at least partially supported by advertising revenue, though some sell subscriptions and monetize in other ways.
• The Internet of Things (IoT): The IoT is the network of devices connected to each other and the cloud — the public internet that allows for links between far-flung systems. It’s everything from a smart thermostat that can adjust the temperature in your home to complex medical equipment that can order its own repairs.
• Streaming Media: You could argue that Netflix is an entertainment company, but it’s also a technology company that has created its own infrastructure. Netlfix creates content for its streaming platform, but it also creates and maintains the platform itself. A company like Roku (NASDAQ: ROKU), which makes streaming media players, is more of a traditional technology sector stock, but could also be considered a member of the next category as it manufactures devices. Streaming media has been growing as consumers look to cut the cord with cable, a trend that has been accelerating.
• Device companies:Players including Roku, GoPro, and Fitbit make devices driven by technology. In many cases, they also make the software that makes them run and gives them added functionality.
• The Cloud: The cloud is a system of computer storage that allows information and services to be accessed by devices from anywhere. The cloud allows companies (and individuals) to use services that are not resident in their devices. Amazon, Google, IBM, and Microsoft are all major cloud players.
• Cybersecurity: With data now housed in the cloud, on our devices, and even in the chips in our credit cards, keeping information secure has become a growing industry. Cybersecurity is about making sure information is only accessible to the people who are supposed to see it.
• Chip/Component makers: Some technology companies don’t make finished devices at all, they make the parts that go inside them. Intel is a good example of this, as the company makes the chips and processors that make computers work. This segment also includes companies that make memory, screens and other parts that go into technology devices.

Capital Markets

Capital markets are venues where savings and investments are channeled between the suppliers who have capital and those who are in need of capital. The entities that have capital include retail and institutional investors while those who seek capital are businesses, governments, and people.

Capital markets are composed of primary and secondary markets. The most common capital markets are the stock market and the bond market.

Capital markets seek to improve transactional efficiencies. These markets bring those who hold capital and those seeking capital together and provide a place where entities can exchange securities.

KEY TAKEAWAYS

• Capital markets refer to the places where savings and investments are moved between suppliers of capital and those who are in need of capital.
• Capital markets consist of the primary market, where new securities are issued and sold, and the secondary market, where already-issued securities are traded between investors.
• The most common capital markets are the stock market and the bond