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Stocks Are Poised for a Big 2024

Stocks Are Poised for a Big 2024

| July 01, 2023

If you follow economic news, you might be concerned about the gloomy predictions of a looming recession, but the financial forecast isn’t entirely bad. In fact, some market experts believe that in 2024, a rise in corporate earnings and a flood of new investment funds will send stocks soaring.

What’s Driving the Market’s Speedy Recovery?

As the economy slows and we move closer to a recession, the stock market has taken a nosedive. But despite that fact, many financial experts expect the S&P 500 to rise an impressive 8% over the next year — even if the market dips further down first amid recession woes.

If you’re new to the stock market, it might be hard to understand the value of that figure. The S&P 500 (Standard and Poor’s 500 Index) is a stock value measurement of the 500 largest corporations, meant to provide a quick look at the stock market’s overall performance. In other words, if the S&P 500 is going up, that means the stock market is doing well too.

In addition, some economic experts believe that corporate earnings tend to rise back up faster than they crash, so even if the market stays in its current downturn for a while, it will likely bounce back faster than you might expect. 

In particular, though, the two main factors predicted to fuel such a rise in 2024 are improved corporate earnings and increased investments across industries. Let’s take a closer look:

Better Corporate Earnings

When companies do well, the market benefits along with them, so although companies tighten their monetary policies and cut costs in economic downturns, they poise themselves for success when things start looking up again. Financial experts think that corporate earnings will recover faster than the economy itself, and they predict that the market boom will happen across all sectors. 

However, there is a caveat: Most experts say these predictions are contingent on one thing: the Federal Reserve lowering interest rates, or, at least, not hiking them any higher. In most cases, the Reserve will cut rates during a recession, but we’ll have to wait until 2024 to know for sure.

A Rise in Investments

While (some) banks seem to have dwindling cash reserves, private equity and venture capital firms have amassed a healthy supply of cash and are sitting on record amounts of “dry powder,” a term that refers to low-risk, highly liquid, and easily-convertible securities. With such impressive reserves, these firms are more likely to increase their investments in 2024, and more investments often translate to higher stock prices.

What Does This Mean for Investors?

As for what these market predictions mean for investors like you, investing before 2024 is likely a good way to get a solid return on investment. Be that as it may, you may not know which stocks you should invest in, especially given that everyone seems to have an opinion on what 2024’s hottest stocks will be. Research, with the help of a trusted financial advisor, is the surest way to invest smartly.

If you buy stocks in modest companies now, you’re likely to get shares for lower prices. Though you might see their values drop precipitously at first, you’ll likely see a great return on investment by 2024, so long as you’re patient and don’t give into the panic selling that a recession can bring. Of course, depending on your financial situation, it may be wise to invest in more than just growth stocks or pursue a different investment strategy altogether. 

If you want to build a robust investment portfolio but aren’t sure where to start, a qualified financial advisor can help you develop the right strategy for your economic situation and financial goals.

How Can Soaring Stocks Help You?

With stock values predicted to rise next year, you might be hoping to cash in on the market’s upcoming boom. Still, whether you’ve invested before or are looking at stocks for the first time, it can help to have a seasoned financial advisor by your side. 

At Good Life, we’re committed to your success. If you’re looking for a qualified financial advisor, contact us to schedule a no-obligation consultation. At this complimentary meeting, we will get a chance to get to know each other. We’ll go over your financial goals, and you can decide whether you’d like us to help make your money work for you.