There’s something happening in the investment world. Some call it a bubble while others call it a craze. No matter what you call it, tech stocks are the thing to buy right now. Of course, this doesn’t mean that you should buy tech stocks (more on this later), but they are the hottest thing on the market at the moment.
Joining the ranks of overvalued companies is Facebook. For some time now, Facebook has been hinting at going public. Now, Facebook has announced that it will go public sometime this spring (April, most likely). For obvious reasons, tech investors are excited to hear this news, though you can expect Facebook stocks to be sky-high. How high? Facebook will soon join the ranks of those tech companies that are way overvalued.
A number of analysts claim that we are currently towards the final stage of a tech bubble – really, the stage before the bubble actually collapses. Given this popular analysis, one has to wonder whether or not Facebook’s going public in the spring is a good move. After all, it’s entirely possible that the company may miss the tech bubble altogether. On the flip side, that might not be such a bad thing.
Right now, investors are buying up tech stocks simply because it’s on trend.
Anything that’s trendy at the moment, stock wise, can provide investors with a few simple bucks. Then again, it’s important to know when to sell that stock. If Facebook missed the tech bubble, it is possible that only serious investors will take a look at Facebook stock. Of course, this would mean that Facebook may not be able to sell that stock at such a high price.
The Overvalued Ranks
Right now, there are many tech companies that are largely overvalued. Facebook would become one of those companies. The popular social network could be valued at more than 100 billion. This would mean that Facebook’s value is higher than Google’s, and that’s really saying something.
Facebook isn’t the only stock to cross the overvalued barrier. Various start-ups like Hipmunk and Groupon are also on the high side. Interestingly, this hasn’t stopped investors from spending a fair bit of change to buy up some of those higher stocks. The question is: is it worth buying a stock that’s overvalued? Well, that depends on how good you are at predicting bubbles and markets.
To Invest or Not to Invest?
The rule to any kind of investment is to know what you are investing in. If you believe that Facebook has a real future, you might want to save your pennies for that rainy spring day when Facebook goes public. If you don’t believe in social networks, there’s no point in putting all of your dollars in Facebook’s basket.
Jumping on the current tech bandwagon is something of a gamble. Keep in mind that bubbles to pop, and the current tech bubble is no exception to this rule. How long before the bubble bursts? Well, that depends on how quickly investors lose tech interest.