Insights

What to trade: The 2024 big picture

By Paul Reid

13 March 2024

what to trade 2024

2024 is a particularly tough year for forecasting. Never before have we seen such a combination of global elections, political tensions, and conflict adding to the burden that the pandemic left behind.

Gold is off the charts, Bitcoin is in the clouds, oil is anyone’s guess, and currencies are breaking patterns and not responding to fundamentals as expected. Meanwhile, stocks are being pushed by sentiment alone, with unexplainable highs and exaggerated and rapid fall. Even the most experienced traders might feel the need to step back and reevaluate 2024. This article aims to help you build a foundation from which you can plan your 2024 trading portfolio.

Central banks are pulling the strings

The mere whisper of interest rate changes from the Federal Reserve can send shockwaves through the market. As a trader, you need to be attuned to these whispers and anticipate the ripple effects.

Watch out for:

  • Bank stocks like Bank of America and JPMorgan Chase, which are sensitive to rate changes.

  • Companies with high debt levels, such as Boeing, that could see their financing costs shift.

The tech and pharma tango

Retail investors are swinging between tech giants and pharmaceutical juggernauts. As a trader, you need to find the rhythm in this dance and decide when to lead and when to follow.

Watch out for:

  • Pharma stars like Eli Lilly and AbbVie, which are attracting investor attention right now.

  • Tech titans like Apple, Adobe, AMD, Alphabet, and Nvidia, which still hold an integral role in future technology.

The Asian ascent

The land of the rising sun is living up to its name right now, with Asian stocks and the Japanese yen flexing their muscles. 

Watch out for:

  • Asian powerhouses like Alibaba, Baidu, and JD.com, which could ride the wave of strengthening markets and currencies.

  • Japan’s economy, which is in the spotlight due to its recent contraction, nearing the inflation target, declining factory output, and a breakthrough in its stock market index.

Navigating the tax tightrope 

The proposed US tax hike on stock buybacks is a high-wire act for corporations. As a trader, you need to balance the potential impact on company valuations with the projected surge in buybacks.

Watch out for:

  • Buyback behemoths like Microsoft and Apple, which could be affected by tax policy changes.

  • The delicate interplay between tax policy, corporate actions, and market reactions.

The Wild West of crypto

The emergence of political finance (PoliFi) in the crypto space, with tokens like MAGA Coin, is the new Wild West. As a trader, you need to decide whether you're a pioneer or a settler in this uncharted territory.

Watch out for:

  • The high volatility and speculative nature of PoliFi tokens.

  • The potential for big gains or losses in this nascent space.

Conclusion

The key takeaway is that, despite all the noise, not much has changed. The markets are volatile and hard to forecast, like always. Just remember the old expression that has served so many traders in the past. Buy low, sell high. If the orders you are contemplating don’t match the simple two-criteria rule, then look for another asset to research. Don’t ignore the obvious warning signs just to keep up with what’s trending in the market.

You might miss a few winning trades, but you might also avoid catastrophic ones too. It’s all down to your personal trading goals and risk appetite. Trading, like a business, is a long journey full of calculated steps in a predetermined direction. 

Set clear rules and goals for 2024 and stick to them.


This is not investment advice. Past performance is not an indication of future results. Your capital is at risk, please trade responsibly.


Author:

Paul Reid
Paul Reid

Paul Reid is a financial journalist dedicated to uncovering hidden fundamental connections that can give traders an advantage. Focusing primarily on the stock market, Paul's instincts for identifying major company shifts is well established from following the financial markets for over a decade.