A Safe Way to Get a Technology Play
One ETF (exchange traded fund) – which is laden with some of the biggest names in technology – is set to offer outstanding returns once the economy recovers. I’m talking about the technology SPDR (XLK), and it allows you to own a "who’s who" of the technology industry, including Microsoft, Google, Intel, Hewlett-Packard, and Apple.
The blue-chip companies amongst XLK’s holdings are at the forefront of developing new industry-leading technology. And for most of them, it is a matter of when, not if, they will develop the next cutting-edge, "must have" software application or product and see their stock take off and produce huge returns. With XLK, you don’t have to guess which one of those companies will be next, because you can own a share of all of them.
XLK’s holdings are very well diversified. So if one or two of the companies fall, the overall effect on the ETF is muted.
XLK is currently trading at the $25/share level, and I expect it will climb toward the $30/ share level in the next 12 months. That would be a nice gain of 20 percent. And if things really get going, I don’t think $35/ share is out of the question. The support level seems to be around $22/share, so the downside is only around 12 percent.
Adding XLK to your portfolio could provide great returns while giving you diversity in the technology sector.
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