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Weekend Wisdom

Being ahead of the curve can be a powerful addition to your portfolio.

Usually there are a few signals in the market that will tell you a big change is about to come. More often than not, I see technology as the segment with a broad change coming.

The thing is, I don't see this change coming from the old tech companies like Microsoft, Intel and Google. I see a big move for names that are not on the tip of everyone's tongue.

I want to share with you my vision for technology investing in the second half of 2013 and show you where I think the winners will come from.


Wearable Tech

Google Glass was announced about a year ago, and we are finally seeing people post pictures of themselves with their new toys. The new deliveries of this super expensive product are a major driver of my thesis.

There is also a lot of speculation around Apple releasing a watch, one that will likely be connected to your calendar on your iPhone or other devices.

To be certain, high tech glasses and watches are not the only products that will be coming to market. There will be dozens of similar products and "also rans" that you might not even hear about. They could be heartbeat-detecting wristbands to cameras that look like buttons.


Connecting the Dots

The one thing all of these devices will have in common is that they will have a very small microchip. This will allow the manufacturer to keep the form factor of the product very small and lightweight. They will need to be small if they are going to be wearable.

Maybe more important than the size of the devices is that they have to connect to the Internet. Yes, a simple Bluetooth connection will suffice, but a Wi-Fi option would be best. This means there are going to be a lot more devices eating up broadband access.

Currently, many homes have a Wi-Fi router... I know mine was bought about 8 years ago and still works fine. But it has its limits, like the number of devices that can be connected. If there are several new products that need a connection, I am going to need a new router.

MORE . . .


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The Next Level Up

So my pain may be just a new router or some other small fix. The real issue comes to some of the businesses whose technology limits are going to be pushed to the max. The "bring your own device to work" movement could be another driving factor in businesses being forced to upgrade their systems.

So while my potential purchase of a new router isn't something that would make you want to buy a Cisco or some other stock, a business upgrade cycle is something that should turn your ear.


Where the Pressure Points Are

When we look at the idea of a potential business upgrade cycle, we have to think about where the investable dollars will go. Having a good insight into what companies will need and what they won't need is crucial. The biggest thing they will need to continue to compete is more bandwidth. That can be achieved by a bigger pipe to the Internet.

They are also going to need better wireless connectivity inside the office, and be strong enough to reach beyond that as well. Being mobile is key to customers, and a workforce that lives in that realm will want to be even more mobile.

Finally, security for hot spots and wireless connections will become a major point. With the need for more mobile communication, there will be a greater chance of a hacker accessing the corporate network. Instead of making it easier to be hacked, a CTO will look for a solution inside of the wireless products that prevent hacking at the source.


Is This Tech 3.0?

Many of these products and ideas are not new ones. Internet service providers and security technology companies have been around for decades now. Wi-Fi isn't exactly cutting edge either.

I am not saying that all of this is an earth-shattering change that isn't already underway. There are dozens of companies that stay far ahead of the curve and are going to say we did this stuff 2 years ago. That is why they are ahead of the curve.

The majority of businesses are not ahead of the curve, and when you can see a flood of mobile devices coming, you should also see the investment opportunity. I know I see it, can you?


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Good Investing,

Brian Bolan

Brian is our Aggressive Growth Strategist and provides commentary and recommendations for the Zacks Breakout Growth Trader.

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