The incessant news reports about serious cyberattacks would be monotonous, if the stakes weren't so enormous. These attacks are occurring with greater frequency and brazenness, with no regard for national borders.
Latest case in point: Microsoft announced last week that it would start notifying users of its online services if they have been victims of state-sponsored hacking attempts, joining the growing ranks of Internet companies that are beefing up their security measures.
Reuters reported last week that Microsoft executives had recently discovered but downplayed state-sponsored breaches to its Hotmail accounts. The software giant is now attempting to rectify its security flaws, as well as the public relations damage.
The perpetual fight against cybercrime is the sort of inexorable trend on which long-term investors should focus. However, if you're concerned about market volatility in 2016, there's one investment that allows you to profit from the growing problem of cybercrime, without exposure to the ups-and-downs of individual stocks. We examine this opportunity below.
This rising incidences of hacking, cybercrime and industrial espionage are creating robust demand for corporate online security. Proprietary information is a major competitive asset, but data security systems are riddled with vulnerabilities, especially as the workforce becomes more mobile and supply chains more global.
Throughout 2015, attacks allegedly emanating from China against the U.S. have placed cyber security on the political front burner and spawned a war of words between the leaders of the world's two largest economies.
The phenomenon of cybertheft is exacerbated by the growing involvement of organized crime. Many financial losses have been traced back to the bank accounts of specific criminal organizations, especially in Russia and Eastern Europe. These tech-savvy gangsters won't whack you; they'll hack you.
As these attacks increase in sophistication and intensity, you can turn this global threat into an investment opportunity that plays out for decades.
PureFunds ISE Cyber Security ETF (HACK)
If you're a conservative investor looking to make money from the fight against hackings, your best bet is PureFunds ISE Cyber Security ETF.