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INVESTMENT CLINIC: I think it might be a good idea to invest in cyber security. How do I go about doing this?

Cyber attacks appear to be happening more frequently.

Everyone seems at risk: big firms such as TalkTalk, the NHS and MPs. I think it might be a good idea to invest in cyber security.

How do I go about doing this?

P. M., Brighton.

Threat: By 2020, companies around the world are expected to spend around £79 billion on cyber security software and equipment

You are right in that these recent cyber attacks have highlighted the need for solid security systems to protect our most sensitive data.

By 2020, companies around the world are expected to spend around £79 billion on cyber security software and equipment. There are therefore good opportunities for you to profit — as long as you realise the risks that come with it.

Backing revolutionary and interesting new technologies is more exciting than other investment opportunities — but it’s also difficult to pick a winner.

What the dotcom bubble of the late Nineties taught us is very few technology companies make huge profits.

Savers ploughed billions into up-and-coming tech firms, causing stock markets to surge.

But only a handful of these firms were successful, causing stock markets to crash as investors ran for the hills.

So unless you have detailed knowledge of the technology sector, choosing individual stocks to invest in is risky. That’s why it’s best to invest through a fund manager who specialises in cyber security or technology.

Ben Yearsley, of adviser Shore Financial Planning, tips the fund Pictet-Security, which invests in firms that provide internet security, physical security and national defence. Nearly 22.5 per cent of the fund is invested in cyber security firms.

Two of its stock picks are Proofpoint and Symantec, both of which offer email protection software.

In the past five years, the fund has turned £10,000 into £22,800.

Ryan Hughes, of broker A.J. Bell, suggests a more general fund called Polar Capital Global Technology, which has turned £10,000 into £19,180 in the past five years.

It has money in a firm called ServiceNow, which offers cloud computing services that allow you to store documents and files online instead of on a disk.

Last year, the firm launched software called Security Operations, allowing firms to spot computer viruses and react quickly to them.

The fund has performed impressively, but technology is a risky sector, so balance out your portfolio with safer options.

  • Send questions to: Investment Clinic, Money Mail, Northcliffe House, London, W8 5TT.