We think there are many top investment strategies for 2024, including a few that span beyond this year. Indeed, we’ve been investing professionally since 1977 and write The Prudent Speculator, an educational newsletter and website dedicated to keeping investors on the path to success with their investments. Over the last (nearly) five decades, there have been a wide range of trends and megatrends, some fizzle out as soon as investors pile in, whereas others have tremendous staying power. Subscribers of TPS receive our annual outlook each December, along with a mid-year update, in which we highlight trends to which our broadly diversified portfolios have exposure. While the list below offers a wide variety of approaches and ways of thinking, we believe those that will be the most successful over the long term include a healthy amount of patience and diversification.
Importantly, investing in 2024 (just like all the other years) requires a consistent approach. Current economic factors like inflation, interest rates, technological advancements and geopolitical dynamics drive news cycles and push stock prices around, but trend-chasing often does more to harm an investor’s portfolio than grow it. We have long argued that the secret to investing in stocks is not to get scared out of them!
Here are some top investment ideas and strategies to consider this year (and beyond):
Diversification
- Spread investments across stocks, bonds, real estate, and commodities to fit your personal goals and risk-taking abilities. We believe holding a list of stocks, spread out over an array of sectors and industry groups is a good way to avoid single-factor or single-company risk.
Technology and Innovation
- Whether Artificial Intelligence (A.I.), Renewable Energy or Biotechnology, companies involved in major technological advances have garnered frequent headlines and enormous amounts of capital from investors.
Interest Rate Sensitivity
- Bonds and Fixed Income are attractive again given 5% short-term yields, but those yields are unlikely to remain high forever and long-term equity returns are more than double the present risk-free rate. Of course, there’s nothing wrong with bonds or cash for short-term needs and goals, but for those with a focus on long-term, it’s hard to shy away from equities. We especially like those of the dividend-paying variety, which tend to be high-quality and can provide a steady income stream and potential capital appreciation.
Global Markets
- Those looking to broaden their horizons actually need not look past U.S.-traded stocks. In 2023, just over a third of revenue for the Russell 3000 index was generated internationally. Broad geographic diversification is possible without leaving U.S. markets!
Inflation-Hedging Assets
- Real estate and property investments can provide income and capital appreciation, often outpacing inflation.
Alternative Investments
- Private equity and venture capital can provide big return figures, but in exchange for upside potential are long investment lockups, minimal investor control and plenty of risk. For small allocations in big portfolios, PE and VC investments can add value, but one needs to proceed thoughtfully.
Portfolio Rebalancing
- Regular Rebalancing, which is to adjust portfolio allocations, to maintain desired allocations, risk levels and capitalize on market opportunities.
Education and Continuous Learning
- Stay informed with The Prudent Speculator. Our monthly newsletter offers stock picks and market musings, while the weekly Market Commentary keeps investors up to date with economic trends, market news and stock-specific investment research.
Kovitz Investment Group Partners, LLC (“Kovitz”) is an investment adviser registered with the Securities and Exchange Commission. This report should only be considered as a tool in any investment decision and should not be used by itself to make investment decisions. Opinions expressed are only our current opinions or our opinions on the posting date. Any graphs, data, or information in this publication are considered reliably sourced, but no representation is made that it is accurate or complete and should not be relied upon as such. This information is subject to change without notice at any time, based on market and other conditions. Past performance is not indicative of future results, which may vary.