How to Invest in Nanotechnology

Microscopic Ratchet

Nanotechnology--the very word conjures of images of a sci-fi future when man and machine are one and we can download products and "print" them out on our nano-printers like we print out text on paper today. Realistically, we are still a ways off from such a future, but nanotechnology does show a lot of promise. The creation of things like molecular machines would have enormous economic benefits for the firms that can use them effectively. The payoffs could be great, but for now, most of the nanotech research companies are speculative.

Things You'll Need

• Brokerage account

Instructions

1. Decide what kind of investment you would like to make. There are a variety of ways to invest in nanotechnology including stocks of individual research companies, mutual funds weighted toward nanotechnology, and more recently an ETF which also seeks to track the value of the nanotechnology sector. Each of these investment vehicles is different and you are encouraged to research them to find the one that best fits your strategy. For this example, we'll invest $5,000 in the Powershares Lux Nanotech ETF, a conservative way to play the nanotechnology investment (see Resources below).

2. Call your broker or log in to your online brokerage account. If calling your broker, simply ask to invest $5,000 in Powershares Lux Nanotech ETF. You can also ask them to advise you on other nanotech investment ideas.

3. If using an online brokerage like Fidelity or Etrade, sign on and click on "Trade." Enter the ticker symbol for Powershares Lux Nanotech ETF (PXN) and enter your investment amount. As this is an ETF (exchange traded fund), there is no minimum investment. You can check the current price of PXN on your preferred financial site or on your brokerage page.

4. After submitting the trade, you should receive confirmation from your brokerage.

5. Watch your investment carefully. Keep track of your investment. Decide how much you are willing to lose or gain and consider setting a sell limit order. This is the price at which you will exit your investment if things go sour. Check with your brokerage on how to set up a limit order.

Tips & Warnings

• As nanotechnology is an emerging technology, it is considered a risky investment. Make sure and do your homework. Most financial advisers recommend a balanced portfolio to hedge against risks.

Resources

• Wikipedia on Nanotechnology
• Current Nanotechnology Products
• Nanotechnology Industry Analysis
• Nanotech Investment Ideas
• Google Finace LUX Nanotech ETF