How to profit from cutting-edge technology: 3D printing, robots, electric cars and other inventions that could change the world

Picking investing winners is tough in any sector, but in technology it appears to require either genius levels of foresight or dumb luck.
There is no shortage of promising ideas that might make a lot of money. Take 3D printing. It doesn't take much imagination to grasp that this is an invention that can transform many industries. But when? What sectors will it conquer first? Which businesses will cash in?
It's quite likely that an unknowable number of years from now, some obscure but crucial industrial process will be revolutionised by 3D printing, and a company that isn't even created yet will rake in a massive fortune.

Revolutionary: 3D printers like this might one day look as quaint to us as those early brick-sized mobile phones do now

Will you be invested in it? For those feeling inspired (or maybe just lucky) we look at inventions whose time will
probably come - at some point - and how investors can position themselves to get rich from advances in technology.
First, here are some basic approaches that can help tech-loving investors to improve their chances and reduce their risks.

Jump on a bandwagon

You don't have to be there at the founding of a future tech giant to make money - just try to recognise one at some point before it realises its full potential.
Despite almost constant chatter about the dangers of a second tech bubble, some of the best-known and most-hyped companies in the sector have performed well for investors who bought in when they were first listed or since they came to the market. 

Wary investors: Many tech fund managers are battle-hardened from the first tech bubble

Among the top names, Google has soared since it floated in 2004, Facebook has rewarded the faithful by recovering after a dismal start last year, and Twitter has confounded critics of its valuation since it launched on Wall Street this month (although it must be stressed Twitter has yet to turn a profit).

Let experts do the legwork

If you think there are good returns to be made from the march of technology, but haven't a clue where they are most likely to come from or just don't care, you are better off with a specialist fund or trust.
Tech fund managers are both knowledgeable and experienced in finding new or developing opportunities in the sector. Many are battle-hardened from the first tech bubble, and sceptical of firms with no clear path to profits.
They will also spread your risks across a range of different investments that could come good at different times - 3D printers might not have a use that generates serious cash for years, but robot floor cleaners might become as popular as dishwashers in the next few years.

But if you are captivated by Gizmo X...

You have to be especially brave, patient, inspired, or all of these things to risk cash on a specific technology idea or invention and wait for the investment to pay off.
But it might be that eventually you will be proved right about Gizmo X's potential, and find yourself in the money.
After all, there was a time when the idea of a powerful multi-purpose mini-phone you could carry around everywhere was still a fanciful notion, and Apple was dismissed as an also-ran maker of buff-coloured cube-shaped desktop computers.
And that is just one example of a technology phenomenon you didn't see coming until practically everyone you knew was an iPhone-owning Mac convert, and those who had long believed in Apple found themselves holding stock in the biggest firm by market cap in the world.

 Surprise: Apple used to be dismissed as an also-ran maker of buff-coloured cube-shaped desktop computers

So what's next? We take a look at some of the contenders below.
We also profile Monks Investment Trust, which doesn't specialise in technology but jumps opportunistically around global markets in pursuit of capital growth.
At the moment, this has led it to invest in some exciting areas of the tech sector.

Electric cars: Multi-storey carparks now installing charge points

Battery-powered motors have been talked up as a replacement for petrol guzzlers for a very long time. Are they finally poised for popular success?
Probably the most high-profile specialist in the sector is Tesla Motors, which is listed on the Nasdaq in New York.
But some of the big, established car makers - giants such as General Motors and Nissan - are investing in electric cars too and could end up being best-positioned to bring them to the mass market.
Rowan Dartington's investment director Tim Cockerill reckons electric cars now seem to be gaining some traction as a consumer product.
'They have built cars that are better than diesel cars. Batteries take less than an hour to charge and you can go 300-plus miles on one charge,' he says.
Cockerill has noticed that the multi-storey carpark right opposite his office is installing charge points for electric vehicles, and takes this as sign that demand for them must be rising.
He says Tesla is obviously a leading stock to consider if you want to be in this sector.
The share price has suffered a setback of late due to safety concerns about battery fires in its vehicles. But it is one of RCM Technology Trust's top 10 investments, and you can find a list of other funds and institutions invested in the firm here.

 

 

Electric cars: Will we all be charging up instead of filling up in future?

Graphene: Don't expect to get rich quick
What is it? A 'wonder material', says Adam Hughes, head of managed portfolio services at Ashcourt Rowan.
'It's one atom thick and has excellent electrical conductivity,' he says. 'It's stronger than steel. But nobody has come up with a practical use for it.'
One suggestion is that graphene could be used to make condoms. This month, University of Manchester scientists won £62,000 of funding from the Bill and Melinda Gates Foundation to develop the idea.

Wonder material: Graphene is one atom thick and stronger than steel

When it comes to investing in graphene, you can turn to AIM stocks like Cientifica and the newly-listed firm Applied Graphene Materials.
But again, it may be that an established company will find the most lucrative way to exploit it first. Intel, IBM and Samsung are among the big hitters researching graphene.
Hughes says that if you are inspired by the possibilities of a product like graphene, the point is not to wait to invest until it's become popular but to steal a march by getting in before everyone else.
But he cautions that companies working on graphene could well lose money for year and years to come.
'It's not about getting rich quick. It's being ahead of the curve and holding on for a long time,' he says.
Hughes adds that as with any investment, people need to be sure of their motivation when putting money into technology.
'If you are investing due to excitement about the potential of a technology, that is going to be a rocky ride in terms of looking at the valuation of your portfolio every month.
'From an investing point of view you need to think about where you start and where you finish, if you truly believe the story behind a product.'

3D printing: Potential to transform existing industries

3D printers are already available but will set you back about £1,000, according to Cockerill. He doesn't think they've got to the point of appealing widely to consumers just yet.
'You can go out and buy one though it isn't clear what you use them for in a domestic setting.'
Tom Walsh, deputy manager of Monks Investment Trust, thinks people get over-excited by the prospect of printing products in their homes when they hear about 3D printing.
He believes there are lots of ways it could disrupt existing industries, but how long this will take is another matter.
The process could prove helpful to designers, who currently have to wait weeks for prototypes to be built but in future could print one off in a day. There is also the potential for printing complex shapes you couldn't produce before, he says
Walsh suggests the aerospace industry could also benefit, because it makes so many complex parts for aircraft.
'You could just have one printer that can produce X number of parts to be fitted into a plane if a faulty part is needed,' he says.
Monks has invested in Stratasys, an American company that is looking to develop 3D printing in a number of different markets, both industrial and consumer-oriented.

Back to the future: Fictional robots like 3-CPO and R2-D2 from 1977 film Star Wars and their spin-off toys have already made people a lot of money

Robots: Will the real thing ever be as popular as Star Wars icons C-3PO and R2-D2?

Fictional robots and spin-off toys have made a lot of money for the likes of Star Wars film-maker George Lucas. Arguably, it will take investors in real robots a while to catch up with all those who have cashed in on famous imaginary versions.
But there is no doubt the idea of robots captivates many people, who will surely be prepared to shell out money once the right product comes along.
Recently there has been talk of robot care workers looking after the elderly and robot security guards being used to guard buildings in future. Security giant G4S has partnered with the University of Lincoln to test robot 'Linda', who has a live webcam here.
Walsh says Monks has exposure to robot technology through its investment in a company called iRobot.
'They make domestic cleaning devices - floor sweepers and Hoovers. Historically they had quite a large military business but that has rather suffered in recent years.'
He believes the use of robotic floor cleaners has potential to become more widespread.

'Not a lot of people have them in their houses today, but a lot of people have dishwashers.'