The stock market has been full of surprises in the last few years. And quite frankly, it hasn’t proved to be the most rewarding place to be at times. 2020 saw markets across the world come tumbling down as the Covid pandemic hit. Since then, we’ve been on a rollercoaster journey.
We’ve had highs and lows. Last year saw the FTSE 100 index hit a new all-time high of over 8,000 points. On the other hand, global conflicts, and surging energy prices, to name just a few things, have seen many share prices take a hit.
But what will 2024 have in store for retail investors? And should I be buying more in the upcoming 12 months?
What’s next?
Well, that’s not easy to answer. I’d love to be able to predict the future. However, unfortunately, I can’t. The truth is that nobody knows what will happen next in the stock market. After all, there are so many factors that go into influencing its performance.
Nevertheless, I suspect a major influence this year will be interest rates. With inflation reaching double digits and hitting levels not seen for 40 years, the Bank of England has been aggressively hiking interest rates to tame red-hot price rises. But with it looking like we’re slowly getting closer to the 2% target laid out by the Bank, many are expecting interest rate cuts this year. No doubt that will provide a boost to investor confidence.
That said, on the other hand, ongoing global geopolitical issues will also play a role. While the Israel-Hamas war may stay confined to the Middle East, any further advancements for Russia in Ukraine will have a large impact on investor sentiment. There’s also a US presidential election as well as the large likelihood of a UK General Election to throw into the mix.
Not bad news
What this reinforces is that the market is unpredictable. But while 2024 has the potential to be a follow-on from what we’ve experienced in the last few years, that’s not necessarily bad news.
That’s because we invest for the long term here at The Motley Fool. There are plenty of ways I can put my money to work. For example, I could try and time the market or use methods such as day trading. However, the market has proved that playing the long game is the best way to reap its benefits.
Last year saw the Footsie rise around 2%. Yet since its inception, its returned around 7% on average every year. With that, I plan to have my money tied up in the stock market for as long as possible.
What I’ll do
I see plenty of value in UK shares at the moment. The FTSE 100 is trading at 11 times earnings. That’s cheap. And regardless of what 2024 has in store, I’ll be snapping up cheap shares and holding them for the years to come with the spare cash I have. I’m not too fussed about where share prices go in the next 12 months, I’m more worried about the decades to come. By doing this, I’m confident that I can build wealth over the long term.
The post Here’s what I think investors can expect from the stock market in 2024 appeared first on The Motley Fool UK.
Pound coins for sale — 51 pence?
This seems ridiculous, but we almost never see shares looking this cheap. Yet this recent ‘Best Buy Now’ has a price/book ratio of 0.51. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 51p they invest!
Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.
What’s more, it currently boasts a stellar dividend yield of around 8.5%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?
See the full investment case
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Charlie Keough has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
