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Top 10 Popular Trading Asset Classes For 2024
Trading
Vitaly Makarenko
Chief Commercial Officer
Iva Kalatozishvili
Business Development Manager
As we begin 2024, the financial markets continue to evolve, presenting both challenges and opportunities for traders. In this dynamic landscape, selecting the right trading instruments is more crucial than ever. These instruments, ranging from digital assets to traditional stocks, offer diverse ways to capitalize on market trends and achieve investment goals. This article delves into the ten most popular trading asset classes poised for big moves in 2024, providing a roadmap for traders to navigate this ever-changing financial terrain.
List of Top 10 Asset Classes for 2024
- Cryptocurrencies
- Exchange-traded funds (ETFs)
- Growth Stock Funds
- Forex Pairs
- Large-Cap Stock Funds
- Commodities
- Real Estate Investment Trusts (REITs)
- Green Energy Stocks
- Government Bonds
- Emerging Market Stocks
Let’s delve deeper into each asset class and also consider some promising candidates in each class.
Cryptocurrencies
Cryptocurrencies have evolved from a niche interest to a mainstream trading instrument. Digital currencies like Bitcoin, Ethereum, and various altcoins are now significant players in the financial sector, far beyond mere speculative assets.
This shift is driven by the growing appeal of decentralized finance (DeFi), the use of digital assets to hedge against market volatility, and the broader integration of blockchain technology across different economic sectors. However, inherent volatility remains a defining feature of cryptocurrencies, presenting both risks and opportunities for high returns.
For effective cryptocurrency trading in 2024, diversification is key. Traders should balance their portfolios with a mix of established and emerging cryptocurrencies. Staying informed about evolving regulations and leveraging advanced trading tools will also be crucial. Additionally, keeping up with ongoing developments in blockchain technology and market trends is essential for success in this dynamic and rapidly innovating space.
Emerging Stars in the 2024 Cryptocurrency Market
Bitcoin
As the cryptocurrency landscape evolves into 2024, certain digital currencies are drawing attention for their unique features and growth potential. Bitcoin (BTC), known as ‘digital gold,’ continues to lead the pack with its robust performance in 2023 and growing institutional adoption. Its limited supply and status as a store of value and huge Bitcoin-ETF buzz suggest a significant role in the upcoming year’s crypto surge.
Solana
Solana (SOL) is carving out its niche with lightning-fast transaction speeds and low fees, making it attractive in the expanding realms of DeFi and NFTs. This technical efficiency positions Solana as a strong contender in the anticipated market upswing.
Algorand
Algorand (ALGO) stands out for its eco-friendly approach, combining fast transactions with low energy consumption. With strategic partnerships and applications in finance and blockchain infrastructure, Algorand is poised for noteworthy growth, especially among environmentally-conscious investors.
Exchange-traded funds (ETFs)
Exchange-traded funds are increasingly becoming the go-to choice for traders, renowned for their versatility across diverse investment strategies. The allure of ETFs lies in their unique blend of variety, adaptability, and ease of access in the fluid financial markets.
ETFs have transformed investment approaches by offering exposure to various sectors, from the ever-evolving tech industry to stable, established economic segments. This makes them suitable for various investment goals, whether it’s accessing high-growth tech sectors or seeking stability in broader market indices.
Their adaptability is a standout feature, catering to different investment styles, from conservative long-term growth strategies to more aggressive, short-term approaches. The broad array of ETFs, encompassing specific industries, commodities, bonds, and international markets, allows investors to tailor their portfolios to their unique risk tolerance and investment goals.
For many, ETFs strike the perfect balance between the growth potential of individual stocks and the risk diversification typical of mutual funds. This balance is especially valuable in a market poised for growth in certain areas while still navigating potential volatility in others.
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Key ETFs to Watch in 2024
SPDR Portfolio S&P 500 ETF
The SPDR Portfolio S&P 500 ETF (SPLG) remains a prominent choice, especially for those looking to tap into the stability and growth potential of the S&P 500. With an affordable expense ratio and a history of strong performance, SPLG offers an efficient way to gain exposure to some of the largest U.S. companies. Its blend of a modest dividend yield and consistent historical returns positions it as a balanced option for growth and income investors.
Invesco S&P 500 Equal Weight ETF
Diversifying the typical S&P 500 approach, the Invesco S&P 500 Equal Weight ETF (RSP) equally weights its holdings across various companies, enhancing its diversification. This equal-weight strategy can lead to more balanced market exposure, potentially offering better returns by giving more weight to smaller, growing companies. RSP stands out for its unique approach to portfolio balancing, coupled with a reasonable expense ratio, making it a viable option for those seeking a diversified investment spread within the S&P 500.
Schwab U.S. Dividend ETF
For dividend-focused investors, the Schwab U.S. Dividend ETF (SCHD) targets blue-chip stocks known for their reliable dividends. This ETF’s approach of investing in financially stable companies with a track record of dividend payments offers an attractive yield. SCHD combines the potential for appreciation with consistent income, making it a compelling choice for investors seeking a dual benefit of growth and income.
Growth Stock Funds
Growth stock funds are attracting significant interest as we head into 2024, especially in sectors poised for rapid expansion. Focused on companies with high growth potential, these funds want to leverage the dynamism of industries like technology and healthcare.
Growth Potential in Tech and Healthcare
These funds invest in companies at the forefront of innovation, often reinvesting profits to fuel further growth. This strategy is particularly effective in the tech sector, where developments in AI, cloud computing, and cybersecurity are driving growth. For investors, this means an opportunity for substantial returns as these technologies continue to integrate into various aspects of life and business.
The healthcare sector also presents lucrative opportunities spurred by advancements in biotechnology, pharmaceuticals, and healthcare technology. The shift towards personalized medicine and telehealth, accelerated by the global health landscape, positions the healthcare sector as another attractive area for growth-focused investors.
While the potential for high returns is a significant draw of growth stock funds, they inherently carry more risk. This volatility stems from the high valuations of companies banking on future growth, making these funds more suitable for investors with a higher risk tolerance.
A strategic approach for traders might involve incorporating growth stock funds as part of a diversified portfolio. Balancing these high-growth investments with more stable, income-generating assets can provide exposure to the potential upside of these dynamic sectors while managing overall risk.
Highlighting Growth Stocks to Watch in 2024
As we navigate into 2024, a few growth stocks are particularly noteworthy for their potential and recent performances, drawing attention from investors.
Snowflake
Snowflake stands out in the cloud data space with its impressive performance in 2023. Key to its appeal are its capabilities in handling vast amounts of data and attracting high-value clients, including those contributing over $1 million annually. The company’s innovative approach to managing unstructured data and new features like Dynamic Tables position it as a promising investment for 2024.
Cassava Sciences
Cassava Sciences, focused on Alzheimer’s treatment, presents a high-risk but potentially high-reward scenario. With promising initial results from its Alzheimer’s drug trials and substantial financial backing, it’s a stock to watch. However, investors should be cautious, considering the challenges and historical difficulties in Alzheimer’s drug development.
Salesforce
Salesforce continues to excel in the enterprise software market, consistently outperforming financial expectations. A strong product lineup, effective integration strategies, and advances in AI technology fuel its growth. With its robust client base and innovative approach, Salesforce is positioned as a solid growth stock for 2024.
These stocks, each in distinct sectors, offer a snapshot of the diverse growth stock fund market opportunities. As investors consider these options, balancing potential rewards with inherent risks will be key to navigating the growth stock landscape in 2024.
Forex Pairs
The Forex market remains a pivotal arena for traders, presenting many opportunities through major and emerging market currency pairs.
Trading in Forex pairs involves navigating the complex interplay of global economies. This market’s fluidity is driven by factors ranging from central bank policies and economic indicators to political stability and global events. As such, Forex trading is about predicting currency movements and understanding the broader economic context that drives these movements.
Success in the Forex market is as much about strategy as it is about knowledge. Traders must develop a keen sense of market sentiment, leveraging economic data and news to make informed decisions. Additionally, risk management is a critical component of Forex trading. Given the market’s inherent volatility, traders must employ effective risk management techniques, such as setting stop-loss orders and diversifying currency holdings, to safeguard their investments.
Top Currency Pairs to Watch in 2024
Certain Forex pairs stand out for their potential and unique characteristics, offering varied opportunities for traders in the Forex market.
EUR/USD
The EUR/USD pair holds the title as one of the most popular Forex pairs, and for good reason. Known for having the lowest spread among many Forex brokers, it appeals to traders looking for stability and straightforward technical analysis. Its relatively lower volatility makes it an ideal option for traders who prefer to minimize risk. The EUR/USD pair’s popularity also means abundant analysis and data are available online, aiding traders in making well-informed decisions and avoiding common trading mistakes.
GBP/USD
The GBP/USD pair is known for its potential for profitable pips and significant price movements, contributing to its popularity among Forex traders. However, it’s important to note that the higher profit potential comes with greater risk. This pair falls into the more volatile category of Forex trading. Despite this, many traders favor the GBP/USD due to the ample market analysis information available online, which provides valuable insights for trading strategies.
USD/JPY
The USD/JPY is another frequently traded pair in the Forex market. It’s known for its low spreads and a tendency to follow smoother trends compared to other currency pairs, making it a preferable choice for traders looking for predictable movements. The USD/JPY also offers exciting opportunities for profitable trading, with its distinct trend patterns and market behavior.
Large-Cap Stock Funds
Large-cap stock funds remain a fundamental choice for traders seeking reliability and steady growth. Investing predominantly in well-established companies with strong market footholds, these funds are known for their consistent performance and resilience, even in fluctuating market conditions.
Large-cap stock funds focus on companies that are often industry leaders and have a history of stable financial performance. These companies are typically less volatile than their smaller counterparts, offering a sense of security to investors. This stability is particularly attractive for traders aiming for long-term growth without the rollercoaster ride often associated with more volatile investments.
In the unpredictable economic landscape of 2024, large-cap stock funds stand out as a prudent choice for those who prioritize steady, incremental growth over high-risk, high-reward investment strategies. Their ability to weather market storms and deliver consistent returns makes them a cornerstone of any well-diversified portfolio.
Large-Cap Stock Funds: Top Picks for 2024
Berkshire Hathaway (BRK-A, BRK-B)
Despite a recent rating downgrade to “hold” from “buy” by investment firm Edward Jones, Berkshire Hathaway remains a stock to watch. The firm’s cautious stance is based on Berkshire’s significant outperformance compared to its financial sector peers, with BRK-B shares up 11% this year. However, betting against Warren Buffett’s long track record of success might be premature. Berkshire Hathaway’s recent earnings remain strong, and the company sits on a significant cash reserve of $150 billion. Over the last 12 months, Berkshire’s Class B stock has gained 24%, outperforming the S&P 500’s 12% gain in the same period.
CrowdStrike Holdings (CRWD)
CrowdStrike Holdings has experienced a remarkable bull run, benefiting from the overall surge in technology stocks. The company’s financial performance has been impressive, with second-quarter earnings and revenue exceeding expectations and a significant year-over-year increase in free cash flow. With raised forward guidance, CRWD stock’s upward trajectory of 58% this year and a 155% increase over five years makes it a compelling large-cap stock in the tech sector.
PepsiCo (PEP)
Despite recent market pullbacks, PepsiCo stands out as a resilient large-cap stock. While its stock has declined alongside broader market trends, the company continues to deliver strong earnings reports and has consistently raised its full-year guidance. PepsiCo’s defensive nature makes it an attractive option, especially if economic contraction occurs in 2024. Trading at 28 times future earnings and offering a substantial dividend yield, PepsiCo is an affordable and stable investment with a five-year increase of 52%.
Commodities
Heading into 2024, commodities such as gold and oil maintain their status as foundational elements in trading. These assets are especially valued for their role as hedges against inflation and economic downturns, a critical aspect in times of financial uncertainty.
Commodities like gold have long been considered safe havens during volatile market conditions. Their intrinsic value often inversely correlates with the stock market, providing a buffer during economic instability. Gold, for instance, is sought after not only for its traditional value but also for its potential to maintain purchasing power when inflation rises.
Oil, another key commodity, plays a pivotal role due to its direct impact on global economies. Its prices are influenced by a complex interplay of supply and demand, geopolitical stability, and technological advancements in energy. Trading in oil requires a keen insight into these factors and their potential impact on prices.
Successful commodity trading involves more than just a basic understanding of these assets. It requires a deep dive into global economic trends, an analysis of market cycles, and an ability to forecast potential shifts in supply and demand. Traders must stay informed about geopolitical events, policy changes, and technological developments that could impact commodity markets.
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Commodities to Trade in 2024
Oil
In 2024, oil remains a key commodity, heavily influenced by OPEC+ policies and geopolitical tensions. The market is expected to stabilize initially, but potential deficits later in the year suggest rising prices. Particularly, actions by major players like Saudi Arabia and geopolitical shifts, such as tensions in the Middle East and US-Iran relations, could significantly impact supply and prices, making oil a commodity to watch closely.
Gold
Gold is poised for a significant upturn in 2024, driven by macroeconomic factors like anticipated Fed rate cuts and a weaker US dollar, enhancing its appeal as an investment. When the Israel-Hamas war broke out on October 7, gold almost reached its previous high of $2,075 per ounce, which was set in 2020. Central banks’ strong buying interest further bolsters the bullish outlook, positioning gold as a favorable asset amid economic uncertainties and as a traditional inflation hedge.
Grains
The grains market presents a mixed picture: while corn and soybean prices might face downward pressure due to surplus production, wheat emerges as the grain to watch. Tightening global stocks, influenced by environmental and geopolitical factors, will push wheat prices upward, making it a notable grain commodity in the 2024 market landscape.
Real Estate Investment Trusts
Real Estate Investment Trusts (REITs) emerge as a notable instrument for investors looking for stability combined with potential growth. REITs offer a unique opportunity to invest indirectly in real estate markets, providing exposure to various property sectors without the complexities of direct property ownership.
Key Features of REITs in the Market
REITs primarily invest in commercial real estate properties, including office buildings, shopping centers, apartments, and hotels. The appeal of REITs lies in their structure, which requires them to distribute most of their taxable income to shareholders in the form of dividends, often leading to higher yield returns than other equities. This characteristic makes them particularly attractive for income-seeking investors.
One of the primary advantages of REITs is their role in portfolio diversification. Unlike typical stocks and bonds, the real estate market, which underpins REITs, often follows different economic cycles. This characteristic provides investors with a hedge against volatility in more traditional asset classes, thereby enhancing the overall stability of their investment portfolio.
Another key aspect of REITs is their liquidity. As they are traded on major stock exchanges, REITs offer a level of liquidity not typically found in direct real estate investments. This trading ease enables investors to buy and sell shares with the same simplicity and speed as other publicly traded stocks, adding a layer of flexibility to their investment strategy.
Furthermore, REITs democratize access to real estate investments. They open the door to property markets for a broader range of investors, eliminating the substantial capital usually required for direct property purchases. This accessibility makes it easier for individuals to tap into the often lucrative real estate sector without the hefty initial investment.
The professional management of REITs adds a layer of convenience and expertise. These trusts are administered by seasoned professionals who oversee all aspects of property management, from acquisition and maintenance to improvement. This management reduces the burden and complexity for individual investors, whom the operational demands of real estate investments might otherwise deter.
Key REITs to Consider in 2024
Prologis Inc. (PLD)
Specializing in logistics real estate, Prologis stands out for its valuable land portfolio and strong demand for its strategically located logistics centers. Despite the e-commerce growth concerns, the need for industrial space remains high. Analysts predict a solid revenue growth for Prologis in 2024, making it a promising pick in the REIT sector.
American Tower Corp. (AMT)
Operating the world’s largest independent portfolio of wireless communications and broadcast towers, American Tower is well-positioned for growth. Key drivers for AMT include the expansion of 5G and the potential in international markets where advanced telecom penetration is still low. It’s seen as a solid investment, especially if the economy maintains its strength.
Equinix Inc. (EQIX)
As the world’s largest data center operator, Equinix enjoys a unique position with limited competition. The company’s focus on site expansions and a stable revenue base makes it attractive to investors. Its status as a preferred partner for top tech companies and projected revenue growth positions Equinix as a top REIT for 2024.
Green Energy Stocks
Green energy stocks represent more than a fleeting trend; they are at the forefront of a significant shift towards sustainable investing. The global push towards renewable energy sources has positioned these stocks as not only ethical investment choices but also as vehicles for potentially substantial returns.
The appeal of green energy stocks stems from their role in promoting a more sustainable, environmentally conscious future. Investing in this sector aligns with global efforts to reduce carbon emissions and transition to renewable energy, making it both a conscientious and potentially profitable endeavor. Governments and corporations worldwide are increasingly committing to green initiatives, which bodes well for the growth and development of companies in this space.
However, the green energy sector comes with its own considerations. The market can be volatile and influenced by various factors, including policy changes, technological advancements, and shifting consumer attitudes. Additionally, many companies within the green energy sector are in their early stages of development. This nascent stage of many companies means higher risks can be involved, but also the possibility of higher rewards for investors who get in early on promising ventures.
Green Energy Stocks to Watch in 2024
NextEra Energy (NEE)
NextEra Energy stands out as a unique hybrid in the green energy sector, combining the stability of a utility company with the growth potential of a solar and wind company. Despite fluctuating bond yields impacting utility stocks, NextEra Energy remains an attractive option, partly thanks to its solid dividend yield above 3%. The company has consistently delivered earnings above consensus, offering a stable source of income and growth potential. With green energy stocks regaining focus and NextEra’s steady performance, it’s positioned as a strong pick for investors in 2024.
Albemarle (ALB)
Albemarle faces a contrarian scenario as the world’s largest lithium producer. Despite a recent collapse in lithium carbonate prices and challenges in the EV sector, there are reasons for optimism. Analysts point to a projected shortfall in lithium production for net-zero goals by 2050, indicating long-term demand. With its shares trading below consensus target prices and recent upward trends, Albemarle could benefit from potential rate cuts in 2024, making it a stock to consider for those betting on the future of lithium and EVs.
Array Technologies (ARRY)
Array Technologies is a noteworthy player in the solar industry, specializing in ground mounting systems for solar panels. The company has demonstrated strong fundamentals, with a notable increase in gross profit despite a revenue dip. Its shift from an operational loss to a gain within a year highlights its robust business model. With expectations of lower interest rates in 2024, Array Technologies could see reduced financial burdens and improved profitability, making ARRY an attractive option for investors eyeing the solar sector.
Government Bonds
Government bonds continue to be a cornerstone for risk-averse traders. Known for their stability and fixed returns, these bonds are a safe haven, especially valuable amidst the prevailing market uncertainties. They serve as a balancing element for portfolios containing higher-risk investments.
The appeal of government bonds lies in their relative safety compared to other market instruments. These bonds offer a sense of security in a year marked by economic uncertainties, providing predictable income through fixed interest payments. Government bonds present a lower-risk option for investors cautious about volatile market conditions.
However, successful trading in government bonds requires a keen understanding of the interest rate environment and overall economic outlook. Interest rates directly impact bond yields, making it essential for traders to stay informed about central bank policies and economic trends. This knowledge enables investors to make strategic decisions about when to buy or sell government bonds, optimizing their investment in accordance with market conditions.
Emerging Market Stocks
As we enter 2024, emerging market stocks remain intriguing for traders seeking high-risk, high-reward opportunities. These markets, spanning across Asia, Africa, and South America, offer the potential for significant growth but also come with heightened risks compared to more established markets.
The allure of emerging market stocks lies in their growth potential, driven by rapidly developing economies, increasing consumer markets, and often underexploited resources. Faster economic growth rates frequently characterize these markets compared to developed countries, which can translate into substantial returns for savvy investors.
However, success in emerging market investments hinges on a deep understanding of various factors:
- Regional Economic Drivers: Each emerging market has its unique economic dynamics, influenced by factors like consumer behavior, government policies, and sectoral growth.
- Political Climate: Political stability plays a crucial role in the performance of these markets. Traders need to be acutely aware of the political situation in these regions, as changes in governance, regulations, and international relations can significantly impact market performance.
Emerging Market Stocks to Consider in 2024
MakeMyTrip (MMYT)
MakeMyTrip, India’s largest online travel agency, stands out as a promising emerging market stock for 2024. Capitalizing on India’s growing middle class and increasing discretionary income, MakeMyTrip operates through platforms like Goibibo and Redbus, offering extensive hotel, travel, and tour services. The company has shown strong performance, with gross bookings exceeding $1.8 billion and a significant year-over-year increase in adjusted EBIT. As India’s economy grows, the demand for travel and experiences is expected to surge, positioning MakeMyTrip favorably in the market. The company’s expansion into new cities and segments, like homestays, further strengthens its potential, making it a promising pick for investors looking at the Indian market.
MercadoLibre (MELI)
MercadoLibre, often dubbed the Amazon of Latin America, has seen impressive growth, particularly in key markets like Brazil, Argentina, and Mexico. With a 100% increase in 2023, MercadoLibre has consolidated its market leadership despite competitive pressures. The company’s diversified business model, including fintech and advertising services, has contributed to its robust revenue growth. With active users and revenues increasing, especially in the Mexican and Brazilian markets, MercadoLibre is positioned as a compelling stock for 2024, offering investors exposure to the expanding Latin American e-commerce sector.
Nu Holdings Ltd. (Nu)
Nu Holdings, a digital banking platform operating in Brazil, Mexico, Colombia, and internationally, is on a strong upward trajectory. With projected sales and earnings growth, Nu Holdings shows considerable potential for 2024. The stock has already experienced significant growth year-to-date, outperforming its industry average. Nu’s robust operating performance, continued growth, and increasing profitability make it attractive for investors looking to tap into emerging markets’ digital banking and financial services sector.
Conclusion
As we look towards 2024, the key to success in trading lies in a well-informed, strategic approach to these top instruments. Staying updated with market trends, understanding the nuances of each instrument, and adapting strategies to the evolving financial landscape will be crucial. Whether it’s embracing the digital wave of cryptocurrencies or tapping into the steady growth of large-cap stock funds, the opportunities for traders are as diverse as the instruments themselves. The future of trading in 2024 is about making informed choices, managing risks effectively, and seizing these top trading instruments’ opportunities.
It is crucial to note that the content provided in this article is for informational purposes only and should not be construed as financial advice. Each investor’s financial situation and risk tolerance are unique, and the investment choices discussed may not be suitable for everyone. It is highly recommended that individuals consult with a qualified financial advisor or conduct their own thorough research and analysis before making any investment decisions. The information shared here is intended to offer insights into potential investment opportunities but does not serve as a recommendation or endorsement of any specific investment strategy or financial product.
