Will growth stocks do well in 2024?
While the Fed has not been clear on its rate-cutting position in 2024, experts believe that it might start in the first half of the year, which means that growth stocks might make you rich in 2024.
We expect lackluster global earnings growth with downside for equities from current levels.β Against this backdrop, value stocks have a strong chance of outperforming their growth counterparts in 2024.
Company | Performance (Year) |
---|---|
Broadcom Inc (AVGO) | 133.39% |
Builders Firstsource Inc (BLDR) | 132.81% |
Constellation Energy Corporation (CEG) | 126.46% |
Arista Networks Inc (ANET) | 106.84% |
Economic growth actually accelerated above its 10-year average in 2023. That resilience, coupled with a fascination about artificial intelligence (AI), changed investors' collective mood. The S&P 500 soared throughout the year and finally reached a new high in January 2024, making the new bull market official.
When it comes to stock selection, targeting growth stocks is a common strategy for long-term investors seeking substantial returns. These stocks typically command higher share prices relative to their earnings per share, as they are expected to experience significant growth in the future.
Third, many Wall Street analysts predict that the S&P 500 will jump in 2024, but with a lower return than last year. Sure, they're guessing, just as I am. However, they think that moderating inflation and the potential for interest rate cuts should be good for stocks.
This year will not be as easy. Investors should expect more volatility, and times when an overall bullish view of the market will be in jeopardy. That said, there are five significant reasons to support why 2024 could be another good year for equity investors.
- Aris Water Solutions, Inc. (NYSE:ARIS)
- XPeng Inc. (NYSE:XPEV)
- NIO Inc. (NYSE:NIO)
- ANI Pharmaceuticals, Inc. (NASDAQ:ANIP)
- Concentrix Corporation (NASDAQ:CNXC)
- Fiverr International Ltd. (NYSE:FVRR)
- Perion Network Ltd. (NASDAQ:PERI)
- StoneCo Ltd. (NASDAQ:STNE)
- Alphabet.
- Amazon.com.
- Apple.
- Meta Platforms.
- Microsoft.
- Nvidia.
- Tesla.
The Motley Fool has positions in and recommends Alphabet, Amazon, Chewy, Fiverr International, Fortinet, Nvidia, PayPal, Salesforce, Uber Technologies, and Zoom Video Communications.
Is 2024 bullish or bearish?
Recent economic data βvalidates our theory that 2024 will be the year of rate cuts, and that's very bullish for stocks,β he says.
The bull market is already well underway
Generally speaking, the best way to be sure about a new bull market is to look for two milestones. First, the market should rise at least 20% from its low. The S&P 500 hit its lowest point on Oct. 12, 2022.
3. How long the average bull market lasts. As much as investors would like the answer to this question to be "forever," bull markets tend to run for just under four years. The average bull market duration, since 1932, is 3.8 years, according to market research firm InvesTech Research.
Though there is no ideal time for holding stock, you should stay invested for at least 1-1.5 years. If you see the stock price of your share booming, you will have the question of how long do you have to hold stock? Remember, if it is zooming today, what will be its price after ten years?
So understand that stocks that trigger the 8-week hold rule often sell off fairly hard during the holding period. This rule helps you sit through that and avoid selling too soon. Once the eight weeks from the original buy point have passed, you can sell to lock in your gains or continue to hold.
Investment in growth stocks can be risky. Because they typically do not offer dividends, the only opportunity an investor has to earn money on their investment is when they eventually sell their shares. If the company does not do well, investors take a loss on the stock when it's time to sell.
Stocks and bonds may both be poised for success in 2024. Easing inflation and a pivoting Fed should reduce headwinds that have faced both asset classes in recent years. Resilient growth may prove to be an additional tailwind for stocks.
Experts with the Motley Fool suggest allocating an even higher percentage to stocks until at least age 50 since 50-year-olds still have more than a decade until retirement to ride out any market volatility.
S&P 500 could hit 6,500 by end-2025, says Capital Economics.
2024 may be a good time to look for bargains in international stocks that have the long-term potential to deliver higher returns than US stocks. Fidelity's Asset Allocation Research Team (AART) forecasts that international stocks will outperform US stocks over the next 20 years.
What is the expected return of the stock market in the next 10 years?
Highlights: Nominal median U.S. equity market return of 4.2% to 6.2% during the next decade; 4.8%β5.8% median expected return for U.S. fixed income (as of Sept. 30, 2023). Vanguard's latest U.S. equity market return forecast is a touch below where it was a year ago. (The firm presents its forecasts in a range.)
Growth in the United States is projected at 2.1% in 2024 and 1.7% in 2025, helped by consumers continuing to spend savings built up during the COVID-19 pandemic and easier financial conditions.
For now at least, analysts are anticipating S&P 500 earnings growth will continue to accelerate in the first half of 2024. Analysts project S&P 500 earnings will grow 3.9% year-over-year in the first quarter and another 9% in the second quarter.
S.No. | Name | CMP Rs. |
---|---|---|
1. | Guj. Themis Bio. | 369.30 |
2. | Refex Industries | 640.95 |
3. | Tanla Platforms | 855.95 |
4. | M K Exim India | 68.37 |
S.No. | Name | CMP Rs. |
---|---|---|
1. | KMC Speciality | 79.67 |
2. | Advani Hotels. | 159.80 |
3. | Man Infra | 186.10 |
4. | Integra Engg. | 206.95 |
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