Here, the Investing News Network provides an overview of the basics before investing in a nanotech stock.

The nanotechnology market is currently experiencing a promising stage of growth, making it an attractive space for first time and sophisticated investors.

From nanotechnology-based solar panels that increase energy efficiency to therapeutics which make use of nano tech in the biomedical field, nanotechnology investing has far reaching effects which are quickly transforming the world.

With that in mind, here the Investing News Network provides a brief overview of what nantoech is, a market overview, and the industrys future outlook to help investors decide if investing in a nanotech stock fits their portfolio needs.

Lauded as the new industrial revolution, research and development into nanotechnology has significant implications for almost every industry. Nanotechnology is the manipulation of matter on a nanoscale. A nanometer is one-billionth of a meter, or approximately 1/90,000th the width of a single human hair. With themarket expected to reach a staggering $75.8 billion by 2020, this microscale is producing macro returns for savvy investors.

In 2006, Lux Research estimated that revenues from products using nanotechnology would reach $2.6 trillion by 2014 (a staggering increase from the $14 billion that nanotech produced in 2004). These optimistic market predictions spurred a flurry of nano investing, including the launch of PowerShares Lux Nanotech Portfolio (NYSEARCA:PXN), an exchange-traded $89-million fund launched by Lux Research and PowerShares Capital Management.

Ultimately the PowerShares Lux Nanotech Portfolio didnt live up to its initial promise. Despite predictions at the peak of the mid-2000s nanotechnology investing bubble, nanotech stockdidnt achieve the rate of growth that investors had hoped and, after primarily incurring losses since its inception, the fund liquidated in February 2014.

However, this news isnt all bad. What has emerged out of a boom and bust market is an industry founded upon strategic long-term business plans, and in-demand innovative products. Many industrial firms receive steady revenue from nanotechnology products, which they re-invest in the market to drive innovation forward.

For example, nanotech giant 3M (NYSE:MMM) uses nanotechnology in its products destined for the dental, electronics, architecture and energy markets. Used in dental restoratives (like fillings, crowns, and orthopedic brackets) and brightness enhancing optical films (which make LCD displays bright and clear), nanotech has a diverse range of uses. Some of 3Ms core nanotech products include 3M Optical Films, Prestige, Filtek.

With an anticipated compound annual growth rate of around 16.9 percent to reach $12.83 billion by 2021according to an Industry ARC reportthe nanotech market appears to be a promising investment. Although the dramatic anticipated growth rates of the mid-2000s are a thing of the past, what remains is a solid market which consistently produces exciting, far-reaching, and potentially transformative innovation.

With the nanotech market poised for significant growth over the next several years, smaller market cap companies are sure to benefit from this flourishing industryincluding the ones listed here.

Taking all of the above into consideration, perhaps investors can now better determine whether investing in a nanostock fitsportfolio needs.

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This is an updated version of an article originally published on the Investing News Network in 2015.

Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.

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Why Invest in a Nanotech Stock? - Investing News Network (press release) (registration) (blog)