Top 10 Investment plans in 2024

Boost Your Investments: How to Plan Your 2024 Portfolio with Interest Rates Going Down

We approach the prospects for both stocks and bonds in 2024 with a sense of cautious optimism, even in the face of increased market risks.

Top 10 Investment plans in 2024
Top 10 Investment plans in 2024

  • Value Stock Funds
  • Growth Stock Funds
  • Small-Cap Stock Funds
  • Large-Cap Stock Funds
  • International Stock Funds
  • Dividend Stock Funds
  • Short-Term Bond Funds
  • Long-Term Bond Funds
  • High-Yield Savings Accounts
  • Commodities and Alternatives

What's Happening in 2024

Within the realm of equities, we identify promising opportunities in various dimensions such as size, style, sector, and country exposures. Our analysis suggests that targeted exposure holds the potential to outperform broad market-weight exposure. 

On the bond front, we find widespread appeal across diverse maturity profiles. Government bonds emerge as our favored exposure. While corporate bonds are priced with consideration for a potential slowdown, they don't necessarily indicate an impending recession, albeit carrying some elevated risk.

 Regarding currency dynamics, the U.S. dollar appears relatively expensive against other major currencies. Hence, incorporating international currency positioning, possibly with hedging strategies, could be a beneficial addition to enhance your portfolio toolkit.

For investors organizing their portfolios for 2024, here are some noteworthy investment categories to explore and monitor for potential opportunities:

Value Stock Funds

Value investing refers to identifying stocks that are undervalued by the market. These stocks are rarely paid much attention to due to the fact that they have great fundamentals with a potential for development. They always go for lower prices than what the fundamental figures such as earnings and revenues would indicate.

Value investing involves under-priced stocks, which will rise in value as the market catches up and discovers their true worth.

Traditional value sectors such as utilities, healthcare, and consumer staples did not perform well in 2023. The VTV, which tracks large-cap value stocks didn’t perform as well as the index.

However, value stocks could potentially rebound in the year 2024 when investors identify low-priced stocks as bargains.

Generally, stocks that perform poorly in a given year tend to fare better in the following year as evidenced by improvements in the market, company performance, or changes in investor sentiment.

Growth Stock Funds

Growth stocks are concerned with companies that grow faster and become profitable. Stocks such as tech, communication services, and consumer discretionary usually represent this space; they rebounded significantly in 2023.

Growth stock funds are those that invest in companies that have the potential to grow faster than other firms, according to Taylor Kovar, who is CEO of the Texas-based Kovar Wealth Management. They’re suitable for those who seek high returns and do not mind assuming risk.

CFRA Research analysts have identified some steady growth stocks such as Exxon Mobil Corp. (XOM), Salesforce Inc. (CRM) and Adobe Inc. (ADBE) which recorded consistent annual revenue growth over the past three years.

SCHG and SPYG are top picks if you intend to invest in growth-ETFs. Additionally, their expense ratios are 0.04%.

Top 10 Investment plans in 2024
Top 10 Investment plans in 2024

Small-Cap Stock Funds

In 2023, smaller stocks, as represented by the Russell 2000 Index, didn't perform as well as larger stocks. Similar to value stocks, this might suggest that smaller companies could see a rebound in 2024, attracting investors with appealing valuations.

Brian Katz, Chief Investment Officer at The Colony Group in Boston, believes that small-cap stocks present an interesting opportunity for 2024. He notes that investors, looking beyond the mega-cap stocks that did well in 2023, may be drawn to the more attractive valuations of small caps. Notable funds in this category include iShares Russell 2000 ETF (IWM) and Vanguard Small-Cap ETF (VB).

Large-Cap Stock Funds

On the other hand, large-cap stocks, particularly in the tech sector, were the stars of 2023, driven by companies like Amazon, Apple, Google's parent Alphabet, Meta Platforms, Microsoft, Nvidia, and Tesla. These stocks thrived on the potential of AI to boost productivity. However, large-cap stock funds, which invest in well-established companies, are generally considered more stable than small-cap funds.

Kovar, an expert, suggests that large-cap stock funds can be a solid foundation for a diversified portfolio, offering steady growth with moderate risk. Large-cap stocks include mature companies with dividends that provide returns even in a downturn.

Additionally, large-cap growth stocks can perform well in favorable market conditions. For instance, the iShares U.S. Technology ETF (IYW), focusing on large-cap tech, has been a top-performing investment in 2023, gaining around 60% with a reasonable 0.4% expense ratio.
10 Top Investment in 2024
10 Top Investment in 2024

International Stock Funds

Over the past several years, international stocks have not outperformed US stock The iShares MSCI EAFE Index is used for tracking developed market equities outside the U.S. and Canada, reporting positive returns in 2023 but lagging behind S&P 500 stocks.

Berg, Chief Investment Officer at Berg Capital, recommends lowering the exposure to international stocks for a period of 18 months to two years. According to her, global currencies will be facing a bearing from interest rates. In this period, the U.S. market is forecasted to have a favorable pace with primarily benefitting large-cap growth stocks.

Regarding international stocks, Vanguard Total International Stock Index Fund Admiral Shares (VTIAX) and Fidelity International Index Fund (FSPSX) should be considered.

Dividend Stock Funds

Dividend stocks are known for their stable income, and they therefore provide stability to the market when it is falling. In the U.S., these include JPMorgan Chase and AbbVie as stable dividend stocks. It is possible to increase the force of dividends collected over time by reinvesting them through compounding.

Long-term diversified investors seeking steady income irrespective of market movements may consider low-fee options such as Vanguard Dividend Appreciation ETF (VIG) and Schwab U.S. Dividend Equity ETF (SCHD).

For those interested in short-term bonds, Schwab Short-Term U.S. Treasury ETF (SCHO) is a suitable choice. Alternatively, a middle-ground option is Schwab Intermediate-Term U.S. Treasury ETF (SCHR).

Short-Term Bond Funds

Short-term bond funds have their own advantages and disadvantages. They generally have lower interest rate risk than longer-term bonds due to their shorter maturities, making them less affected by interest rate changes. However, this comes with a trade-off – lower yields compared to longer-term bonds, potentially resulting in less income for investors. Short-term bonds may also be more influenced by inflation, as their returns may not keep pace with rising prices.

Recently, investors have leaned towards intermediate-term instruments. If inflation cools and rates stay stable or decrease, shorter-maturity yields may not be as attractive as those with more duration.

For those interested in short-term bonds, Schwab Short-Term U.S. Treasury ETF (SCHO) is a suitable choice. Alternatively, a middle-ground option is Schwab Intermediate-Term U.S. Treasury ETF (SCHR).

Long-Term Bond Funds

Vanguard Long-Term Bond Fund (BLV) follows the long-term, investment-grade U.S. bond market and has gained about 3.6% year-to-date as of Dec. 6, thanks to strong rallies in November and early December.

Long-term bond funds have pros and cons. On the positive side, they offer higher yields than short or intermediate-term bonds, potentially giving investors more income. In a falling-interest-rate environment, these funds can see healthy gains. However, the longer maturities make them susceptible to interest rate risk; when rates rise, bond prices fall, impacting the fund's value. Long-term bond funds may also be more affected by market volatility than shorter-term ones.

According to a UBS report on bonds in 2024, Federal Reserve rate cuts and easing inflation may lead to declining yields, benefiting quality bonds. Despite the potential for higher rates, high-quality, long-term bonds may still be attractive compared to cash.

A reliable choice in this category is Schwab Long-Term U.S. Treasury ETF (SCHQ), or for exposure to bonds with different maturities, iShares Core U.S. Aggregate Bond ETF (AGG) is popular.

High-Yield Savings Accounts

A high-yield savings account becomes more appealing when interest rates are high, providing investors with a competitive yield on their cash. Compared to regular savings accounts, high-yield options offer a better return, maximizing interest earnings. This makes them a preferred choice when interest rates are elevated.

With many analysts predicting rate cuts in 2024, investors should keep a close eye on the rates in their high-yield accounts, according to Derek Amey, Managing Partner at StrategicPoint Investment Advisors. Rate hikes have benefited savers because the interest they earn is closely tied to the front end of the yield curve.

Currently, two noteworthy high-yield savings accounts are UFB Direct's Secure Savings account, offering 5.25%, and Synchrony Bank High Yield Savings, providing 4.75% as of Dec. 7, with no minimum balance and no monthly fees.

Commodities and Alternatives

Commodities and alternative investments, like real estate, can be diversification tools in an investment portfolio. Commodities such as gold, silver, oil, and gas, or agricultural products can act as a hedge against inflation and economic uncertainties. Additionally, commodities often have a low correlation with stocks, potentially providing a buffer during market downturns.

Heading into 2024, commodities are underperforming stocks, but there may be some positive signs. Wes Moss, Managing Partner at Capital Investment Advisors, notes that commodities are at lows relative to stocks. Capital discipline in the energy sector and factors like underinvestment and green energy policies have started moving commodity prices.

For instance, over the past three years, the price of oil increased from less than $50 per barrel to over $70, and gold rose from $1,800 per ounce to more than $2,000 in the past two years. Trends like near-shoring, re-shoring, and conflicts involving energy-producing nations could result in high energy costs.

In conclusion, as we navigate the financial landscape, it's crucial to adapt to changing market conditions. High-yield savings accounts shine when interest rates are high, providing a competitive yield for cash. Investors should stay vigilant amid predictions of rate cuts in 2024.


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