The investment landscape has been catching steam as of late, and it shows little signs of slowing down this 2024.
With ups, downs, and in-betweens, there have been a lot of financial movements across different investment channels this year. Moreover, most year-to-date valuations from major public companies like Apple and Alphabet are still well into the positive.
That said, inflation and interest rates continue to remain elevated. This has led many individuals to tighten their spending and put their money into more conservative growth vehicles, like bonds.
A recent, mid-year recession has also caused a global market selloff, causing fear and uncertainty in the market as billions of dollars from the stock market have been liquidated.
Regardless of the recent market correction, for investors in it for the long haul, the volatility of the market is business as usual. Investing is still a solid way to passively grow one’s income, and there are many ways you can do it in 2024.
Let’s explore some of the most popular investment strategies.
1. Real Estate Investing
One popular investing strategy that’s here to stay in 2024 is real estate property investing.
In the vast majority of cases, land value is always set to increase. This is especially true in fast-growing cities and the suburbs surrounding it in developed nations, such as the United States and Australia.
Given this fact, having a piece of land and property can be an excellent way to grow your net worth, hedge against inflation, and/or increase your income potential.
There are many ways investors can transform their property into an income-generating asset—from flipping it to renting it out to tenants for the long term.
Furthermore, you can also choose different types of properties to own and rent out, from commercial property to residential housing.
The one major drawback of real estate investing is that it has a high barrier to entry. Most properties can wipe out millions of dollars in your bank account throughout its lifespan. While you can and should mortgage it out, the total cost and obligation can be a major hit to your cash flow for decades to come—and this includes the interest rate.
In either case, when strategically thought out, you can grow your money substantially with even just a single real estate property. This, in turn, can increase your equity in the process.
2. Government and Corporate Bond Investing
In 2024, bond yields are, on average, valued much higher than they were in the years prior. This makes it an attractive option for investors to grow their capital in a safe but capable investment channel.
Both corporate and government bonds are seen as decent for yielding returns. These bonds are fixed-income securities that pay out dividends until maturity. Unlike other investment channels, the income investors can derive from these bonds is fixed and known about in advance.
As capable as they are, government and corporate bonds lock your principal in for the duration of the agreement. This can last as short as five years or as long as thirty years, depending on the terms of the contract. You will, however, get a fixed annual payout equivalent to the annual yield percentage. This is called a coupon payment.
One strategy that many investors are employing is the bond laddering strategy. This technique entails investing in multiple bonds that mature in different years. The newly expired bond can be reinvested in a bond that matures a year after the current longest-term bond, continuing the cycle.
3. Stock and ETF Investing
While the world is reeling from a market correction as of August 2024, it’s important to take a step back and look at the bigger picture: most stocks and index funds are up relative to their value at the start of the year.
For instance, the S&P index fund, which mirrors the stock value of 500 of the biggest companies in the US stock market, is still up by 9.35% YTD in 2024. Major publicly listed companies across the tech and healthcare industries are also up by 10% to 15%, like
Regardless of the current market state, learning how to read charts and applying sound fundamental and technical strategies when selecting shares of stocks is crucial to improving your portfolio. These are also activities that every investor worth their weight has gone through on their own.
Another cool perk of stock investing is the ability to score on annual dividends. This can help increase your capital a little more (by 2-6%) each year, which can add up if you’ve allocated a significant amount of money in dividend-yielding stocks like TLS ASX.
4. Gold Investing
Yes, you read that right: gold and other commodities are in season this 2024. In fact, gold has increased by over 20% from its year-to-date valuation as of August 2024, and is currently sitting close to its all-time high.
One reason why gold is such an attractive option for investors is that it acts as a tangible store of value. This makes it a great asset to have during times of economic turbulence.
Furthermore, gold is also valuable on a global scale. It’s not only storable in gold bar form but it can also be repurposed into jewellery (in fact, over 49% of gold becomes jewellery) and other valuable objects.
People across different nations understand its scarcity and inherent value, making its market a wide pool of potential investors.
Gold can even be accessed through gold-based exchange-traded funds (ETF) and mutual funds, with shares representing an ounce of actual, material gold. This option is considered to be the most sought-after strategy of most investors in 2024.
5. Cryptocurrency
No one would’ve believed that Bitcoin, Ethereum, and other altcoins would be able to bounce back from the 2021-2022 crash, but they did. And they came back formidably strong.
Cryptocurrencies are among the most volatile and risky investments in the market, but with the proper strategies, these investments have the ability to provide high potential returns.
In 2024, there have been new developments in the space that have just added to its mainstream adoption. For instance, Ethereum was added to exchange-traded funds in June 2024, allowing investors to own it without actually owning the native token.
While the recent market crash has lowered the current value of cryptocurrency, there’s no denying that this investment option is here to stay. And with the proper investment and exit strategies, it’s very possible to own a profitable portfolio.
6. Emerging Market Investing
While everyone has their eyes on developed markets and their pertinent companies, a few investors are starting to shift their focus and diversify into companies and ETFs from emerging markets.
South Korea, Taiwan, Vietnam, and Turkey are some countries that have headed the spotlight for emerging markets in 2024. These countries have developing economies that are among the best in their region, or even continent, yet few outside players have fully capitalised on them yet.
These countries have specific industries that are their main money makers.
For instance, South Korea and Taiwan lead with technology and AI. On the other hand, Vietnam leads in trade and manufacturing. Turkey leads in agricultural products, textiles, motor vehicles, and construction equipment.
Of course, there are other nations that deserve worthy consideration in your portfolio, but the ones listed above are some of the common ones that investors are starting to realize and dive deeper into.
7. Diversification
While investing remains popular, it’s important to consider various scenarios, including inheriting shares in Australia. Understanding the tax implications and management of inherited shares can help you optimize your portfolio and make informed investment decisions.
What do you think is the best course of action: investing in one stock or in a dozen different ones?
In most cases, it’s the latter. Putting multiple eggs in your basket is called diversification, and it’s an effective strategy that many investors in 2024 are sticking with for this year and beyond.
Instead of just picking a single stock, investors have chosen to spread to different stocks in different industries. They may also choose to add a healthy mix of low-risk and high-risk options, depending on their risk tolerance, financial goals, and overall strategy.
The reason why diversification is such an appealing option for investors is that it helps provide stability to a portfolio.
In case one sector or one stock dips considerably, the overall portfolio won’t be vastly affected. This can make your investments more predictable and stable over time.
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