Listener Questions Answered: How to Invest in Tech During Retirement?

In this clip, Alison Southwick, Robert Brokamp, and Motley Fool co-founder David Gardner dip into the mailbag to answer questions from our listeners.

How should an investor approach tech after retirement? How should investors think about percentage allocations, and investing in ideas they're passionate about? Also, David Gardner gives his most important advice for new investors for building a portfolio, and three tech trends they should consider putting some money into.

See the full podcast by clicking here. A transcript follows the video.

This podcast was recorded on Jan. 15, 2016.

Alison Southwick: "I'm nicely positioned for a comfortable retirement that I hope to start in four years. I have a long-term view in spite of being 56, and I'm a techie at heart that believes the Internet of Things is going to be a game-changer that I really should participate in."

For everyone who's listening, the Internet of Things is the idea of a connected world where your thermostat talks to [a] chip in your clothes, everything's talking to each other. Either of you could come up with a better definition of the Internet of Things, but it's the idea that everything is smart, and technology -- yay!

Alright. "If I carve out $125,000 in my Roth for this, it would represent less than 10% of my total investments, so I see it as a good, managed approach to taking on more risk and reward within my total portfolio. David Gardner seems quite supportive of the Internet of Things movement as a place to grow wealth, and I'm thinking he's likely right. So I should hook my cart. Thoughts?"

David Gardner: So, of course, I do like and believe in the idea. Getting away from phrases and sometimes buzzwords like "Internet of Things" and just saying, there will be a chip -- or should be a chip -- in almost anything that is consequential.

A chip in, certainly, our iPhone today, that's Find My iPhone, it makes it possible for you and me to do, right through to the table that's there in your corporate staff room so that people who are managing assets -- the physical assets and the property -- know where the table is. It might sound mundane to put a chip in just a table. At the same time, chips are so cheap, it just makes sense, so that you know where everything is. So, less theft, all kinds of implications for this.

Chips inside you and me. I will be somebody who's perfectly willing to take the tiny little pinprick, incision, or whatever to no longer have to keep my driver's license. I would be happy. Not everybody would agree with this, but I would be more than happy to take my vitals in a tiny little microchip and just have it inserted in, I don't know, let's go with my elbow, so that I could just slam on my elbow and just make my life easier. Chips in everything.

So, I think, yes, that's the case. However, I don't think you necessarily should think in terms of, "I will allocate 10% of my portfolio to Internet of Things." What I would do is I would say that you should be looking at the next 30 years as an investor and asking, "What are the technologies and companies that will get me there?" And I would pick ones that you yourself know or feel comfortable with.

So, you don't have to go out and find which is the next best Internet of Things company, when you know that -- this might be a little silly of an example -- but Amazon is going to be selling tons of things that have chips in them, and you and I are going to be buying and upgrading our tables, perhaps. So, I think that recognizing a trend doesn't mean that you have to latch on to a single company or The One.

Southwick: "The Chip Company."

Gardner: I think it's more recognizing the importance of that, and making sure that you're invested not in Xerox, but in Amazon, as an example. Did that answer that good question? Did I hit at least half? I go for the gentleman's C, so if you're telling me I got a C-, I'm really satisfied with that.

Southwick: No, no. I think one of the issues that comes with investing in growth stocks, which is the phrase that people throw around ...

Gardner: I try not to use it.

Southwick: I know you try not to use it.

Gardner: Yeah, that's a hang up of mine. But keep going.

Southwick: But, the idea that these are stocks that are just going to take off and head into the stratosphere. We all want those stocks. Like, yes, I want the stocks heading to the stratosphere. But there is a certain amount of risk involved with these stocks. So, I guess, for our listeners out there who are thinking, "OK, yeah, you know what? I want to invest in some really good companies better going to take off," there's no guarantees that they are. So, I guess, what's some general advice from you for people who are really new investors? Who are really new and are thinking, "OK, I want to invest in some "growth stocks"?"

Gardner: Well, I think your first 15 stocks, and I hope you get from zero, if you're at zero today, I hope you get to 15 as fast as possible. We want our cars to go zero to 60 in five seconds. I'd like you as an investor to go from zero to 15 as quickly as possible. That means you have $1,500, that means you put $100 in 15 different stocks. And you can do that through things like ShareBuilder or other accounts you can open today. So, getting diversification right away. And then, make those 15 the 15 that you know best.

That's how you should start. And if that means, because you love technology or are into this, that you start to buy those kind of companies, great. If not, that's fine too. So, for most people, at Motley Fool Answers, we're talking about one answer to you, "How do I get started investing?" Start with stuff that you know and love, and make sure that you have a bunch of them, not just a single one. So, from there, I think that if you find that you're missing a lot of the key tech trends, I would say, really quickly, the Internet, virtual reality, and biotech and genomics are three really important to trends of our time. History will look back and say not that we were Generation X Y or Z. They'll say we were the Internet Generation. And that's going to continue to be very vital.

So, if you find that none of your money is in those three things, I would encourage you to take, let's say, 10% of your growing portfolio, and put it there. And have fun. If you're totally wrong, if you blow it, that was only 10% of your portfolio. On the other hand, if you find a company like Netflix or Amazon early on, it'll grow to be a large part of your portfolio in a good way.

Robert Brokamp: I'll highlight something you said when you first started addressing this question, having the money invested for 30 years. So, long-term horizon. This is someone who's close to retirement. And some people think, "Well, I don't have 30 years." But you do. This fellow is in his 50s. Thirty years is his 80s. He needs his money to last a long time, so having a portion of your portfolio that you designate as very long-term is smart.

And it's particularly smart that he's using his Roth, from a financial planning perspective, because if you look at various studies, they show that when you retire, you should tap your taxable account first, then your traditional tax-deferred, and then your Roth. So, if you're going to do this type of investing for something that you don't need for 30 years, a Roth is a great place to do it.