Will 2024 Be a Good Year to Invest?

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Should you plan to invest in 2024? Read on to find out. 

As of this writing, it’s pretty fair to say that 2023 has been a decent year for the stock market. The S&P 500 index, which is generally considered a measure of the broad market’s performance, is up 19% year to date. That’s after a fairly volatile fall that had many investors bemoaning some on-screen losses in their brokerage accounts.

But what should investors expect from 2024? Will the market perform well, or will the coming year be a rocky one?

In the absence of a crystal ball, it’s really hard to know. On the one hand, 2024 is an election year, and that alone could spark some volatility. But volatility doesn’t always translate to losses.

It’s a good idea to plan to invest in 2024. But you’ll want to do so with the right attitude and approach.

Every year is a good year to invest

If you’re not sure whether you should plan to invest in 2024, consider the fact that any year could be considered a good year to invest. If stock values fall in 2024, it’ll be a good time to scoop up shares of quality businesses at a discount. And if stock values remain high, that’s not a bad thing, either, because if you hold your investments for many years, there’s a good chance they’ll gain value over time.

That said, if you’re going to invest in 2024, or at any other point, for that matter, you’ll need to take the right approach. That means planning to hold onto your stocks for many years.

If you invest to make a quick buck, you may end up sorely disappointed. You could end up setting yourself up to lose money, not make money. However, if you plan to invest for the long haul, you might be nicely rewarded over time.

Over the past 50 years, the stock market’s average return has been 10%, as measured by the S&P 500. This doesn’t mean that every year over the past five decades has been a stellar one for the market. Rather, it means that over time, the market has delivered a fairly impressive return accounting for both strong years and weak ones.

So let’s say you invest $5,000 in a bunch of S&P 500 stocks or ETFs in 2024. If your portfolio delivers that same 10% yearly return over time, then after 30 years, you’ll be sitting on over $87,000.

Make sure to diversify

If you’re going to invest in 2024, there’s another key thing to do — make sure to load up on a nice mix of stocks. If you invest all of your money in a single company or industry, you may not end up with the results you’re after.

Let’s say you opt to focus on auto stocks, only the auto industry experiences a major shakeup in the coming year that causes share prices to plummet. Granted, you could argue that it’s not a big deal if you’re investing on a long-term basis. But still, you want to bake in some degree of short-term protection, too, because you never know when you might need to liquidate stocks to free up cash. So make sure to branch out into different segments of the market.

Another easy way to diversify? Buy a bunch of S&P 500 ETFs, which give you exposure to hundreds of stocks with a single investment.

It’s hard to say whether 2024 will be a strong year for the stock market, an average year, or a poor year. But if you’re wondering whether 2024 is a good year to invest, the answer is a resounding yes, no matter what actually happens.

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