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Apps, including Twitter and Facebook, are shown on an iPhone in Washington on May 21, 2013.Evan Vucci

If there's a get-rich-quick trick to investing in the technology sector, Jeff Stacey would like you to let him know.

"I see waves of emotion in technology investing," says Mr. Stacey, founding partner of Stacey Muirhead Capital Management Ltd. in Waterloo, Ont.

"When BlackBerry was at $150 a share, all people could see was clear skies ahead. Now that it's around $7, they think the sky is falling."

Investment professionals such as Mr. Stacey tend to view the reality of the technology sector as more prosaic. The next big thing may be exciting, but there is more reliable money to be made by being dispassionate, strategic and methodical.

It's a matter of not overestimating the positives or the negatives and being realistic. Rather than jump on bandwagons, Mr. Stacey says, it's better to look at the underlying value of the investment.

That, Mr. Stacey says, means asking questions such as: What products or services does the tech investment you're looking at offer? What are its prospects of a good return? Does the stock, fund or investment have a long-term game plan? Is it a candidate to be taken over or an investment like Amazon or Google that might do well on its own? If it's an app or hardware, do you know what the company actually does and who runs it?

Analyzing these kinds of details can be particularly hard to do in technology, says Ian Palm, a partner at law firm Gowling Lafleur Henderson LLP who advises clients putting together deals in the sector.

"It's hard to find a pattern that applies across the board. It's more like a mosaic," Mr. Palm says.

"The tech sector recreates itself on a regular basis. New business models develop all the time, and new technology opportunities arise as a result of regular disruption."

Disruption is what makes investing in technology both exciting and harrowing. A new app, piece of hardware or even a feature can obliterate an existing company's business in months. Remember Friendster? Netscape? Plastic floppy discs? Or, for that matter, camera film?

There are many ways for a sophisticated investor to buy into technology. Mr. Palm focuses on helping clients put together private equity, merger and acquisition, and venture capital deals, where prospective investors will meet directly with the companies they're investing in and grill them about their work and their business plan.

Other ways to invest are to buy into technology funds or indexes. Right now, the news tends to focus on individual company shares and initial public offerings; the most recent newsworthy issue is Twitter, which entered the market on Nov. 7 priced at $26 (U.S.) a share (sending the news of its IPO price in a tweet).

This put the company's opening value above $18-billion – for a firm that has lost about $300-million in three years and may not turn a profit next year. Investors are either looking strategically at Twitter's potential to generate ad revenue – or they're guessing.

On one end of the retail investment spectrum there are celebrated companies with huge profits and gains, such as Apple and Google. On the other, there are companies such as BlackBerry, which just replaced its CEO as its shares remain mired in single digits and its future remains uncertain.

"No one will say they [BlackBerry] have done everything perfectly," he says. But there is value in the company if the price is right.

At around $7, the share price factors in BlackBerry's current assets – the cash it has on hand plus what it can reasonably expect to take in during the next quarter or so, even if sales are bad.

"And you get the buildings, the networks, the patents, all the technology. Apple was in a similar situation when it bottomed out at single digits. It had a really big cash horde."

Mr. Palm agrees with Mr. Stacey that investors should keep perspective in mind.

"I don't think the success of the Canadian tech sector is beholden to the success of BlackBerry," Mr. Palm explains. "The interesting thing now would be to focus on where people see the next real opportunities."

Both Mr. Palm and Mr. Stacey note that, while the technology sector is global, a sophisticated investor needs to have a lot of knowledge about a faraway market or company before plunging in.

It's interesting to look at companies in countries with knowledge clusters, such as Estonia, where Skype was invented, or India or China. "But I like the idea of buying things you can touch," says Mr. Stacey, explaining that, in the context of technology, this means looking at investments where you understand the fundamentals.

"Many investors will tell you that you need to invest locally – in other words, if you're not in India yourself, good luck in making an investment in a small company there," Mr. Palm says.

"The venture capitalists and investors that I work with will talk about the management team as the most important factor when they're choosing whether to invest in a given company. Many will say they need to be within a short distance of the management team so they can meet them for breakfast," Mr. Palm says.

"It's a matter of understanding both the market opportunity and the ability of the management team to execute. It's all well and good to have a vision for what you want to create but if you have limited ability, it's not going to be easy."

Both Mr. Stacey and Mr. Palm remember the boom and bust at the turn of the century, yet both remain undaunted by technology. The sector is old enough now that there are steady, more boring earners, Mr. Stacey says, while Mr. Palm says that "there are great opportunities" if you look for them.

"[The technology sector] is a bit like a phoenix," Mr. Palm says. "It recreates itself in a new form every few years."