Data breaches and hacks can impact the sensitive information of businesses, organizations and individual people. Cybersecurity helps prevent these cyberattacks, and the demand for cybersecurity is expected to soar in the coming years.
Cybersecurity stocks include companies that offer cybersecurity consultation for businesses and organizations. It also covers cyber recovery solutions if you’ve been a victim of a cyberattack.
Cybersecurity is the art of defending networks, systems and data from digital attacks. These cyberattacks attempt to access information without authorization. They are designed to steal or destroy data, extort money or for other criminal use.
Cybercrime costs global economies about $600 billion every year, according to the Center for Strategic and International Studies. That’s an increase from the estimated worldwide losses of $445 billion in 2014 and isn’t predicted to decline.
The rise of cyberattacks has prompted public and private organizations to look for solutions to protect themselves from these dangerous and costly breaches. The global cybersecurity market is predicted to grow from $149 billion to $208 billion by 2023, according to a Cybersecurity Global Market Report.
With the growth of cybercrime, firms and governments will turn to cybersecurity companies for help. And since more than half the world is now online and the demand for cybersecurity is more pressing than ever, it might be a good time to invest in cybersecurity stocks.
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Cybersecurity is a newer industry that got its start with antivirus software and firewalls in the late 80s. Unfortunately, many cybersecurity stocks are based on private companies that are fairly new. And since tech moves fast in the cyber world, smaller, newer companies may struggle to keep up or incur a lot of debt.
Investors may also have trouble gauging winners in the cybersecurity space because the industry is based on hindsight. For example, it is only after a cyber attack that you can definitively evaluate companies and how effective they were in preventing the attack.
The cybersecurity sphere can be volatile as investors and companies are finding their footing.
Cybersecurity stocks cover companies that bolster cyber defenses through various services, including hardware and cloud-based software.
Exchange-traded funds (ETFs) allow you to invest in a spectrum of cybersecurity stocks.
Evolve Cyber Security Index ETF Hedged trades on the Toronto Stock Exchange, but you’ll have a hard time finding other options in Canada at present. If you want to invest more heavily in cybersecurity stocks, you’ll need to access stock exchanges outside Canada like the NASDAQ or NYSE in the US.
There are several Canadian-based brokerages that offer access to international exchanges on which cybersecurity ETFs trade including Interactive Brokers and Questrade.
Take a look at a few trading platforms to invest in this fast-evolving industry.
To make comparing even easier we came up with the Finder Score. Trading costs, account fees and features across 10+ stock trading platforms and apps are all weighted and scaled to produce a score out of 10. The higher the score, the better the platform—it's that simple.
There are risks associated with investing in cybersecurity stocks. But since the demand for these services isn’t going anywhere, cybersecurity might be a profitable long-term investment.
You’ll need a brokerage account to get started — compare a few trading platforms to invest in data protection.
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