Although many sectors have been experiencing financial turbulence, ecommerce businesses have been doing quite well in the past few years. According to Forrester Research, the ecommerce industry is expected to continue growing at a rate of 60% by 2015, to total $279 billion in value.
However, investing in ecommerce can be somewhat confusing for individual investors. Ecommerce stocks don't constitute a sector of their own, but are instead spread across other industries such as retail, travel, and entertainment. This leaves investors with a variety of options. In addition to starting up your own ecommerce business using free POS software, it's possible to pick and choose individual stocks that look promising or invest in managed mutual funds.
However, investing in ecommerce can be somewhat confusing for individual investors. Ecommerce stocks don't constitute a sector of their own, but are instead spread across other industries such as retail, travel, and entertainment. This leaves investors with a variety of options. In addition to starting up your own ecommerce business using free POS software, it's possible to pick and choose individual stocks that look promising or invest in managed mutual funds.
Ecommerce Stocks
By mixing stocks from a wide range of different industries, you can protect your portfolio from sudden dips in specific sectors. Choosing to invest in ecommerce businesses with an eye towards the future can be a good long-term investment. Large retail or entertainment businesses such as Amazon.com and Netflix are some of the most popular choices for ecommerce investors, while online travel businesses like Hotels.com and Expedia have also done quite well.
The key to choosing the best ecommerce stocks is to research how the business has embraced changing trends in online retailing. Some of the top trends to take note of include whether or not the business has made the move into mobile marketing and sales, and the user-friendliness of their website. Businesses that combine professional platforms like a Shopify online payment gateway with high-quality products will generate more sales. You'll also want to research their growth patterns and forecasts for the future, as well as take a wider look at the industry that they are part of. As with any stock purchase, research is vital when investing in ecommerce stocks.
Mutual Funds
Another option for investors is to take a look at ecommerce mutual funds. These are professionally managed by experts in the finance industry, who have a strong working knowledge of investment data and trends. Although investing in individual stocks has the benefit of allowing you to back your favourite companies and exercise a high level of control over your portfolio, it also carries a certain degree of risk.
One of the main benefits of choosing to invest in mutual funds is that they involve less risk. Not only is the fund professionally managed, but because a variety of ecommerce stocks are included in the fund, the overall value won't be dragged down too far should one of the companies start to fall. Because your money is combined with the money of other mutual fund investors, the manager has greater buying power which can yield discounts and access to more exclusive ecommerce stocks. This will help you earn potentially larger rewards.
There are certainly pros and cons to investing in both ecommerce stocks and mutual funds. To succeed with either type of investment, you'll need to follow ecommerce trends closely and spend some time on research.
