I believe the best shares to buy now are those that have bright prospects as the world moves on from the pandemic. There is a range of businesses that fall into this basket. However, I’d focus on stocks and shares in the technology sector.
Coronavirus has accelerated the take-up of technology and technology solutions worldwide. Indeed, back in April of last year, Microsoft CEO Satya Nadella speculated that the pandemic had driven two years’ worth of digital transformation in two months. Since then, the development and uptake of technology have only accelerated.
That’s why I believe the best shares to buy now can be found in the tech sector. That being said, fortunes have been made, but also lost in the technology industry. It’s one of the fastest-changing sectors, making it a challenging place for investors.
With that in mind, I want to limit the risks of investing by using a diversified portfolio. I’m also avoiding small tech businesses because I believe these are incredibly difficult to analyse. I think it’s much easier to understand how a big company makes money.
Tech fund
There’s a range of options available to UK investors regarding tech investing. One of the easiest ways to access the tech sector is to buy a fund. This makes it easier to buy investments, but it doesn’t necessarily guarantee returns.
Many tech-focused investment funds have produced lousy returns for investors. Some have even wiped out investors entirely. Unfortunately, investors often don’t find out about the mistakes managers have made until it’s too late.
Still, the best performers, such as the Scottish Mortgage Investment Trust, do look attractive to me. This investment trust has a long track record of tech sector investing, and it has knocked it out of the park in the past five years. Since the beginning of 2016, shares in the investment trust have added 456%, excluding dividends. This is certainly impressive, but tech investing can still be incredibly challenging, as mentioned above. So, there’s no guarantee this investment trust will continue to beat the market.
The best shares to buy now
I think some of the best shares to buy now in the tech sector are Sage, AVEVA and Avast, in terms of individual equities. All three of these businesses are leaders or near-leaders in their respective industries.
Sage is one of the largest accounting software providers in the UK, AVEVA provides software for the engineering sector, and Avast deals with cybersecurity. These are all critical functions.
Trust is everything. Engineers wouldn’t want to use software they can’t relying on to design essential components. Companies won’t use accounting software they don’t trust, and individuals won’t use cybersecurity software that doesn’t keep their personal information safe. As such, I believe all three of these companies have substantial competitive advantages.
That being said, these advantages could also be drawbacks. If AVEVA starts cutting corners with its software design, it could lose clients quickly. Therefore, while I believe these are some of the best shares to buy now, I’m conscious of the risks these businesses face.
That’s why I’d buy the stocks in a diversified portfolio to own some of the market’s best technology businesses.
