As 2024 rolls on, the investment outlook looks good and promising. In 2023, the best investments, especially the S&P 500, despite its fluctuations, end on an upward trend, reflecting renewed investor confidence. It witnessed a market rebound, followed by volatility and a recent return to positive trading.
J.P. Morgan’s insights point to a promising 2024. They predict steady growth and a recession-free first half for the U.S. economy. With higher bond yields and favorable stock valuations, we’re looking at some of the best investment returns in years.
This guide will explore key investment opportunities for 2024, including various stock funds, bond funds, high-yield savings, and alternative investments. How you adapt to these conditions is crucial for a successful 2024 investment strategy.
Table of Contents
Top 10 best investments for your portfolio in 2024
1. Growth stock funds
In 2023, technology, communications, and consumer discretionary sector growth stocks soared. Growth stock funds emerged as top performers when investing in companies with rapid revenue and earnings expansion. These funds are stellar choices for those seeking higher returns and accepting higher risk.
Top picks like Exxon Mobil Corp., Salesforce Inc., and Adobe Inc. demonstrate steady growth. With low expense ratios, ETFs like Schwab U.S. Large-Cap Growth ETF and SPDR Portfolio S&P 500 Growth ETF are among the best investments for 2024.
2. Value stock funds
Value investing focuses on uncovering undervalued stocks with strong fundamentals, set for future growth. Traditional value sectors like utilities, health care, and consumer staples, despite being laggards in 2023, show potential for a rally in 2024. Funds like Vanguard Value ETF track these undervalued stocks, allowing investors to capitalize on market adjustments.
3. Small-cap stock funds
Compared to their large-cap counterparts, small-cap stocks offer unique opportunities, particularly when undervalued. Despite underperforming in 2023, small-cap stocks could rally in 2024, making investments like iShares Russell 2000 ETF and Vanguard Small-Cap ETF attractive.
4. Large-cap stock funds
Dominated by tech giants like Amazon, Apple, Google, and Microsoft, large-cap stock funds witnessed significant growth in 2023. Investing in established, large companies provides stability and moderate risk, making these funds a cornerstone for diversified portfolios.
With the potential for steady growth, large-cap stock funds like iShares U.S. Technology ETF, which soared in 2023, remain among the best investments for the coming year.
5. International stock funds
Although international stocks haven’t matched the performance of U.S. equities in recent years, they remain key for portfolio diversification. Experts suggest a cautious approach to international equities for the next 18 months due to global currency pressures.
Yet, for diversification, Vanguard Total International Stock Index Fund and Fidelity International Index Fund are top choices, making them one of the best investments for those looking to broaden their portfolios.
6. Dividend stock funds
Dividend stocks, like JPMorgan Chase & Co. and AbbVie Inc., offer a stable income stream and can offset losses during market downturns. They’re ideal for long-term investors seeking steady income. With their low fees, Vanguard Dividend Appreciation ETF and Schwab U.S. Dividend Equity ETF are among the best investments for consistent income regardless of market trends.
7. Long-term bond funds
These funds, like Vanguard Long-Term Bond Fund, offer higher yields and can show gains in a falling-interest-rate environment. However, they carry interest rate risk.
With expectations of easing inflation and rate cuts, high-quality long-term bonds, such as Schwab Long-Term U.S. Treasury ETF and iShares Core U.S. Aggregate Bond ETF, are positioned as one of the best investments for 2024.
8. Short-term bond funds
Short-term bonds, with lower interest rate risk, are less susceptible to market fluctuations. They offer a trade-off of lower yield but increased stability. Schwab Short-Term U.S. Treasury ETF and Schwab Intermediate-Term U.S. Treasury ETF are recommended for those favoring shorter maturities, making them a wise choice among the best investments for investors seeking lower risk.
9. High-yield savings accounts
High-yield savings accounts stand out as a smart choice in an era of high-interest rates. They offer competitive yields, outperforming traditional savings accounts and maximizing interest earnings. As Wall Street analysts predict potential rate cuts in 2024, keeping a close watch on these accounts is crucial.
Derek Amey of StrategicPoint Investment Advisors highlights their correlation with the front end of the yield curve. Top accounts like UFB Direct’s Secure Savings and Synchrony Bank High Yield Savings offer rates up to 5.25% and 4.75%, respectively, with no minimum balance and monthly fees. These accounts are among the best investments for investors seeking a safe and reliable return on their cash.
10. Commodities and alternatives
Commodities like gold, silver, oil, gas, agricultural products, and real estate are essential for diversifying an investment portfolio. They provide a hedge against inflation and economic uncertainties, with a low correlation to equities, acting as a buffer during market downturns.
Wes Moss from Capital Investment Advisors notes the rising prices in commodities such as oil and gold, driven by factors like green energy policies and geopolitical tensions. Energy, commodities, and real assets may thus hold significant value for investors in 2024, especially for those aiming to build a well-diversified, long-term portfolio.
Read also: How to invest to generate a monthly income
