What does 2024 hold for investors? As the end of the year approaches, surveys indicate that investors are optimistic about their bets in the coming year.
With the value of the S&P 500 index rising by 20%, compared to 46% for the Nasdaq 100,
and the value of the preferred company in the field of artificial intelligence rising by 220%,
will the year 2024 be better than the year 2023 for investors? According to the latest polls, the answer is yes
Some Investors in the Stock market consider the year 2023 one of the best years for trading,
as the shares of SFT jumped by 56%, Amazon Jumped by 75% and Meta Platforms jumped by 170%,
while The possibility of using artificial intelligence has been the focus of investor interest.
Despite the warnings, some survey participants expect that next year will be better,
as 63% of the participants expressed their optimism and expected the performance of their investments to be stronger.
Topics
Interest
Stubborn inflation
Positive movements
Big Companies
The American elections and their results
Traditional Pattern
Interest
Dealing optimistically with the Interest,
assuming that the US Federal Reserve decides to reduce interest rates,
which leads to a rise in stock and bond markets.
Participants in the survey, including investment portfolio managers and individual investors,
expressed their optimism in the field of artificial intelligence,
as they consider this field a long-term source of earning profits,
exceeding the increase in the share prices of pharmaceutical production companies,
such as “Novo Nordisk” and “Eli Lilly And Co.” or companies that provide cybersecurity
Some of the Participants shared their experiences
and the lessons they learned from the losses
due to high inflation and increased borrowing costs,
and how these losses made them better investors
and put them in a position to become better investors in the future,
as one of the participants said:” I built a special strategy to avoid making mistakes,”
while another one said, “My strategy is to do better research.”
Stubborn inflation
With the stock market rebound reinforced by expectations of lower interest rates in the near future,
respondents realized that inflation is the biggest threat to this scenario
because it will prevent the US Federal Reserve from lowering interest rates.
49% of participants spoke of the rise in the cost of living
being the greatest threat to an individual’s financial well-being in the year 2024.
At a time when we are witnessing a slowdown in the annual inflation rate,
we are witnessing an increase in the prices of basic materials and electricity by 25%
since the beginning of January 2020,
in addition to Used cars prices increased by 35% and rents by about 20%.
Some of the participants commented that unexpected medical expenses consider these expenses their biggest fear.
Positive movements
Investors in artificial intelligence see the biggest positive
move in terms of their personal investments over the next decade,
as 67% choose investing in artificial intelligence as their first choice before investing in cybersecurity companies,
which were chosen by 20% of the survey participants. In contrast,
weight loss drug companies received 8% of participants despite the media interest in them,
believing that these companies would not bring them profits.
Big Companies
Opinions differ about major leading technology companies.
If 45% of the survey participants consider investing in major technology companies
during the next year is a bet on growth,
16% believe that these stocks are a safe haven,
while 39% said that investing in these companies is a bad investment
and that these stocks are a bad investment and do not deserve all the reviews they get.
The CIO of Americas at Morningstar Morning Wealth, Marta Norton,
stated that the large profits achieved by the technology sector
this year means that trading in the sector is equal to
or close to the lowest valuation obtained by any American sector.
An analysis published by “Morning Wealth,” indicated that the American technology sector
received a boost thanks to artificial intelligence,
on the assumption of long-term revenue growth of 200 points annually,
in addition to an increase in the profit margin of 300 basis points, for 10 years,” as stated by Norton.
The analysis continued: “This point of view cannot guarantee that
we will have great confidence in the technology sector during the year 2024,
nor does it represent a bet that we can take at the present time.”
The American elections and their results
57% of respondents expected to change the distribution of their assets during the year 2024,
with 31% of them saying that they intend to transfer their money to fixed-income assets,
while 26% indicated an increase in their investment position in stocks,
and 52% said that they would invest large sums of money
that they will receive during the year 2024 from A salary increase or financial bonus, in stocks or bonds.
Despite all of the above, cash remains a source of attraction for investors,
as approximately 25% of the survey participants decided to keep any cash bonus they would receive.
In comparison, 19% will use it to pay bills and pay off debts,
while only 5% announced that they will spend the cash bonus. For something important like a vacation or a car.
In general, 38% of participants expected the possibility of saving more money next year,
while less than a fifth of participants said that they did not expect to be able to save large amounts.
As for the US presidential elections,
many of the survey participants saw that
the US presidential elections have nothing to do with their financial affairs,
as 47% expected that the elections that will be held in November 2024 will not have a major impact.
While 27% of the remaining participants indicated that the re-election
of former President Donald Trump would have a negative impact on their financial resources,
26% said that the re-election of current President Joe Biden would have the worst impact.
Traditional Pattern
On average, the S&P 500 index rose 7.5% in presidential election years,
which is less than the prevailing move,
and less than the typical return of 13.5% in the third year of a presidency,
according to a report by the Head of US Equity Strategy at RBC Capital Markets Lori Calvasina.
Calvasina stated in her report that the traditional method will face a weak start next year,
a rise followed by a decline and volatility in the markets as the election date approaches,
and a rise as a result of the elections.
Calvesina set a target of 5,000 points for the S&P 500 index next year, equivalent to an increase of 9%.
According to Calvasina, the election year represents a source of instability in the US stock market.
Looking at all unusual aspects of the electoral competition in the 2024 presidential elections
appears to be the most appropriate way to think about
the conditions surrounding the stock market in the coming year.
