Investing in the Internet of Things

KALAMAZOO, Mich. - June 22, 2015 - PRLog -- Technological innovations have started pushing connectivity to new places, which is often referred to as the Internet of Things (IoT).

In this Internet of Things, a “thing” is any person, animal or object with the ability to transfer information over a network. It can be a person with a pacemaker that sends medical information to the nearest emergency room or a car that evaluates traffic in real time to avoid crashes. We believe this creates investment opportunities in companies involved in three key areas.

Machine-to-Machine Solutions
Machine-to-machine (M2M) technology is the foundation of the Internet of Things. This technology is common in the utilities and oil and gas industries, whose operations span across broad geographic areas. Global Positioning System (GPS) satellites also enable precise control of machine functions, such as guiding bulldozers and helping farmers more accurately plow fields and apply pesticides

Connectivity in New Places

We expect to see connected devices continue evolving beyond smartphones and tablets to wearable technology such as fitness bands, smart watches and smart glasses. Even household appliances are becoming increasingly “smart.” Washers, dryers, refrigerators, thermostats and smoke alarms now have the ability to interact with other home systems and hand-held devices. The connected car is becoming a reality, with new features such as traffic-based routing suggestions and real-time vehicle diagnostics.

The Power of Data

As our society becomes more interconnected, the amount of information we collect is increasing. From apps to email, the amount of data generated has surged, resulting in a phenomenon commonly referred to as Big Data. By using data about shopping habits, social media usage and Internet browsing history, business analytics software can target ads to each customer, empower shoppers with more pricing and product information, and work to find the right deals for each specific customer.

Action for Investors

The growth of the Internet of Things is creating investment opportunities for long-term investors. To learn more about these opportunities, talk to your financial advisor. Together, you can identify stocks that may be appropriate for you.

Bill Kreher, CFA
Senior Equity Analyst

Investing in equities involves risks. The value of an investment will fluctuate with changes in market conditions and may lose some or all of its principal.