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Why Investing in Big Tech Companies Shouldn't Be a Complete No-Brainer FAANG stocks have asserted their presence on the market, but are they a safe bet for your investments?

By Phil Town

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Opinions expressed by Entrepreneur contributors are their own.

If you watch Netflix, buy items on Amazon and use Google to look up terms on the fly, you may not even know you could be investing in FAANG stocks. FAANG -- an acronym for Facebook, Amazon, Apple, Netflix and Google -- can be thought of as the big tech companies. With today's world increasingly more dependent on technology, the FAANG companies are becoming increasingly more significant.

In this video, Entrepreneur Network partner Phil Town explains how FAANG companies have both their benefits and downfalls. For one, financial literacy has increased with the rise of these FAANG companies.

Moreover, if you are already investing or have invested in these companies in the past, you may have noticed their astounding growth rate. Town explains how there are a few key markers you should look for before investing; ask yourself a couple of key questions to make certain these stocks are right for you.

For example, consider what is the meaning of investing in the stock? Warren Buffett once mentioned he would rather invest in chewing gum over one of the companies of FAANG. Nowadays, he has changed his tune a bit and invests in at least one big tech business of FAANG. Finally, consider if there is a moat around the stock. This means, look for a degree of certainty around the company's direction.

To hear more tips about investing in the FAANG stocks, click on the video.

Related: How to Make Sure You're Paying for What You Need With Health Care

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Phil Town is an Investment Advisor, Hedge Fund Manager, 2x New York Times Best-Selling Author of Rule #1 & Payback Time, and Ex-Grand Canyon River Rafting Guide. Rule #1 Investing is Warren Buffett style investing, teaching you how to buy businesses on sale, with little risk and 15 percent returns. In fact, Rule #1 investing is practically immune to the ups and downs of the stock market.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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