5 Investing Themes for 2024 and Beyond

By George Sweeney

Many global markets bounced back in 2023 after a tough 2022, and it’s time to look ahead to the coming year. Markets will always be impacted by what’s happening in the wider world, but the benefit is that we can find threads to follow, giving some indication of where we might be heading next.

To delve a little deeper into what could be in store for 2024, we’re going to explore a few different themes that could impact various investment areas over the next 12 months. No one knows exactly what will happen, and 2024 will surely throw up some surprises, but we can at least get a sense of what might unfold based on the speed of current tailwinds and headwinds.

2023 has been a historic year, with the fed fund rate currently sitting at its highest level in the last 22 years. And inflation has pretty much halved from 6.4% in January to 3.1% in November. The reopening of global economies hasn’t gone as smoothly as expected — there've been bumps and surprises. So, what’s ahead and in store for 2024?

1. Lower interest rates

Although Federal Reserve policymakers decided to stick rather than twist in the most recent meeting, keeping rates at current levels, we could see as many as three rate cuts in 2024. If this happens, it could act as a catalyst to get the markets moving again — providing investors with the confidence to push more dollars into stocks and less into fixed-income assets like Treasury bills. Lower rates could lead to a 2024 mini-boom in the stock market, although much good news could already be priced in.

2. Artificial intelligence (AI)

AI was the theme of 2023, with stocks like Nvidia (NVDA) blasting off. Although we’ve already seen huge growth in this sector, businesses are only just starting to test and implement AI technology. In 2024, we’ll see a lot more AI integration and development as the money flooding into the space this past year begins to bear fruits. For investors, you’ll likely have to contend with high valuations for quality AI-related stocks. But, if you’re investing long-term, these investments could pan out well over the next 5 to 10 years (although picking the future AI leaders is a challenge).

3. Cryptocurrency resurgence

History doesn’t repeat exactly, but it does tend to rhyme. Cryptocurrency, and Bitcoin (BTC) in particular, is heading through another cycle. After the dramatic market crash and ensuing problems with crypto lenders and bad actors like Sam Bankman Fried (SBF) and his FTX platform, it seems like the trash has been taken out. Even Binance and Changpeng Zhao (CZ) have had to face the music in 2023.

In 2024, we’ll get another Bitcoin halving — an event that has typically been the starting gun for the next crypto bull market. Possibly, we might finally see a Bitcoin exchange-traded fund (ETF), which would be another bullish event. If we also find ourselves in a macro environment with lower interest rates and stable inflation, this will only benefit the crypto ecosystem further.

4. Emerging markets bouncing back

Deglobalization in the fallout from the pandemic and moving supply chains away from China is creating ideal conditions for investment opportunities elsewhere. One particular market getting a lot of attention is Mexico. With many companies looking to use “nearshoring” or “friendshoring” to bring manufacturing closer to home, plenty of capital is being pumped into Mexico to help the market mature and develop.

However, there are also lots of opportunities elsewhere — like Brazil, Thailand and Vietnam, for example. After a tough few years, a weakening dollar from lower rates could lead to an emerging market resurgence. Nearshoring and friendshoring from deglobalization is creating lots of opportunities. One of the best (and cheapest) ways to invest in these areas is by using a top ETF broker to buy funds targeting these regions.

5. 2024 presidential election

This will probably be the most unpredictable event coming in toward the end of 2024. Realistically, it’s hard to say what difference it will make to markets, whether it’s a Republican or a Democrat who takes office.

But there is likely to be uncertainty and volatility in the stock market around the election. Things will probably settle down, whatever happens, but it’s worth staying patient and perhaps looking for investing opportunities during this period.

George Sweeney is a deputy editor at Finder. He has previously written for The Motley Fool UK, Nasdaq, Freetrade, Investing in the Web, MoneyMagpie, Online Mortgage Advisor, Wealth and Compare Forex Brokers. He's focused on making personal finance and investing engaging for everyone. To do this, he draws from previous work and his Level 4 Diploma for Financial Advisers (DipFA), sharing what he’s learned. When he’s not geeking out about money, you’ll find him playing sports and staying active.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Stocks Emerging Markets Central Banks Artificial Intelligence Cryptocurrencies