Cybersecurity took center stage in 2018 and could present an exciting investment opportunity

Cybersecurity has always been a topic of importance for both enterprises and individuals. However, 2018 was riddled with events that highlighted just how crucial an issue it is, following privacy breaches such as the Cambridge Analytica Facebook scandal. With renewed interest in online safety and privacy, the cybersecurity sector is attracting increasing attention in the investment world.

2018 – the year of the hack

The attention to online privacy reached new heights in 2018, following the Cambridge Analytica scandal, which jeopardised the data of some 87 million Facebook users¹. The scandal put in question many of Facebook’s user privacy practices, resulting in Founder and CEO Mark Zuckerberg testifying before Congress. A month later, the General Data Protection Regulation (GDPR) came into effect in the EU, applying new restrictions on any entity that collects personal data.

The dynamics of online security

One of the reasons cybersecurity is, and will remain, a hot topic is the ever-changing nature of the online world. With so much sensitive information being stored in the cloud and on computer networks, the risks are ever growing and the need for effective cyberdefenses is ever present. From “simple” risks, such as phishing scams, to complex ransomware programs and crypto mining bots, each person and enterprise with an online presence is in danger of falling victim to a cyber attack.

The cybersecurity industry is huge, estimated at more than $150 billion in 2018, and projected to grow to $230 billion within 4 years². Both companies who specialize in cyber defence and the giants of the tech industry spend billions every year to beef up their defences, and protect their valuable intellectual property and their users’ personal information.

Investing in the cybersecurity industry

As mentioned before, there are two main types of companies that operate in the cybersecurity field. The first type is companies whose exclusive business is developing and implementing cybersecurity solutions, such as Check Point and Symantec. The second type is companies with larger tech or security operations, which also have a substantial presence in the cybersecurity space, such as tech giant IBM and defence and security powerhouse Lockheed Martin.

To offer its clients exposure to this growing industry, eToro has created the CyberSecurity Smart Portfolio. This professionally constructed portfolio will offer investors access to a thematic investment strategy focusing on cybersecurity companies. The portfolio includes companies working to protect commercial entities, private individuals, government and military institutions and more.

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