In our modern economy, a business owner is running a huge risk by not focusing on cybersecurity. Just how big? IBM found that the average cost of a data breach in 2021 was $4.24 million, up from $3.86 million the year before.

Investing in cybersecurity could be the difference between a business staying open or closing its doors for good.

The calamitous risk posed by online threats have been matched by an equal growth in the cybersecurity industry, with spending on risk management and technology services set to hit $150.4 billion by the end of 2021. This represents a growth of 12.4% from 2020.

And as a result of this increased focus, cybersecurity stocks are on the rise. Let’s take a deeper look into the state of the industry and what that means for cybersecurity investments going into 2022.

Why Are Cybersecurity Stocks Rising So Fast in 2021?

There are a variety of factors influencing growth in the cybersecurity market, but we’ll focus on two main ones in this piece: the pandemic and the growing sophistication/frequency of cyberattacks.

Cybercrime and the criminals who perpetrate them have upped their game: the Canadian Anti-Fraud Centre said it received 12,676 reports from 6,930 victims totalling CAD$30.2 million in losses from cyber fraud alone.

Cyberattacks have been growing in frequency for years, but with more people working from home, that only further emboldened bad actors. Work-from-home setups are notoriously vulnerable to cyberattacks.

This is especially alarming as the average cost of a cyber breach was $1.07 million higher where remote work was a factor in causing the breach than in instances where it was not a factor.

Should You Consider Investing in Cybersecurity Stocks in 2022?

 Considering the pandemic accelerated cybercrimes with more data compromised in just 12 months of the pandemic than the entire previous 15 years combined, it’s safe to say that cybersecurity stocks still have plenty of room to grow.

And although most of the developed world seems to have a better hold on COVID-19, it doesn’t mean we’ll see people return to the office full-time anytime soon. In fact, it’s looking like more companies are adopting the hybrid model, with some already investing in tools for virtual collaboration and IT infrastructure. The need for cybersecurity in work-from-home setups isn’t expected to slow down anytime soon.

Moreover, cybercriminals are constantly developing and finding new ways to breach networks and servers. This necessitates an equal effort to counter them, which is great news for cybersecurity companies, as businesses will need to continually invest in cybersecurity to stay ahead of the game. Otherwise, they risk incurring massive breaches that could lead to millions in lost revenue.

Why Choose a Cybersecurity ETF?

Cybersecurity, as an industry filled with growth potential, will attract a number of new companies looking to enter the cybersecurity industry and take advantage of the growing demand. Some of these companies will be effective, others looking to just cash in on the growth trends and market momentum. It remains a challenge for investors to choose which stocks are winners among the lot.

Cybersecurity ETFs offer a great way to gain exposure to this industry without being locked into any single security, and without the hassle of stock picking. ETFs allow you to diversify by investing in multiple companies in multiple markets, ensuring that a single market shock won’t tank your portfolio.

Investing in Cybersecurity with CYBR ETF

If you’re looking to invest in a cybersecurity ETF, consider Canada’s first cybersecurity ETF, Evolve Cyber Security Index Fund (TSX Ticker: CYBR). CYBR ETF invests in global companies involved in the cyber security industry. For more information, visit the fund page here:

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