Consumers are constantly faced with a myriad of choices that can make or break their financial future. As the year draws to a close, understanding forecasted financial trends is crucial for optimizing your portfolio.
From emerging technologies to shifting global dynamics, Forbes Finance Council members dive into the hottest financial investment trends for the new year. By understanding which trends are likely to dominate the market, you can make more informed and strategic financial decisions in 2024 and beyond.
1. Move From Mutual Funds To Exchange-Traded Funds
We have seen a massive trend of investors moving from mutual funds to exchange-traded funds. The majority has been into passive (index-oriented) ETFs. However, we think investors should consider active ETFs, which give consumers access to the best of all worlds (tax efficiency, transparency and proper risk management, versus the irresponsible level of concentration in an index like the S&P 500.) – Adam Eagleston, Formidable Asset Management
2. Invest In Increasing Cybersecurity Needs
Indices that are pegged to the performance of companies engaged in the Cybersecurity segment of the technology and industrial sectors (e.g., NQCYBR), remain strong performers. Businesses and individuals are facing increased cyber threats, making investments in this sector very attractive. – Simone Grimes, Acadia Insurance (WR Berkley Company NYSE: WRB)
3. Embracement Of Values And Unlisted Investments
Investors are increasingly looking for opportunities that align with their values, such as investments in clean energy and socially responsible companies. Advances in technology attract significant attention but should be accessed through expert fund managers. Democratization of private markets, with access to unlisted investments is growing rapidly, as investors seek both diversification and value. – Mark Woolhouse, Treble Peak
4. Watch For Diversification In Industry
Watch for diversification into niche private market segments. We’re eyeing modular-build drive-through coffee stands and see consistent income opportunities in recession-resistant markets such as dental service organizations and grocery-anchored retail. If the economics work for multifamily development right now, we see an opportunity to deliver into a supply-light market in 2025 and 2026. – Azure Erickson, Ignite Investments
5. Be Mindful Of Looming Recession
Consumers should be mindful that historically, eight to nine months after periods of rapid interest rate hikes, it is not uncommon to hit a recession. Consumers who are closer to or in retirement should educate themselves on today’s ways to reduce risk other than just increasing an allocation to bond funds since bonds tend to not do well in a rising interest rate environment. – Ronald Gelok, Ronald Gelok & Associates
Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?
6. Diversify Savings Accounts
Interest is back! Savings accounts have been an afterthought in the days of near-zero interest rates, but now is a good time to make sure cash is working as hard as it can. Consolidation platforms that allow you to shop around savings (whether notice accounts, instant access or fixed term deposits) are worth exploring as well as checking whether your banks have “existing customer” special offers. – Sabrina Castiglione, Pento
7. Understand Alternative Assets
Understand the role that alternative assets play in a diversified portfolio and access to alternative asset investing. Interesting data from Bank of America shows that 75% of investors aged 21 to 42 don’t think it is possible to get above-average returns by investing just in equities and bonds, with 80% of this age group opting for alternative investments. – Matt Ong, Ctrl Alt
8. Monitor Real Estate Effects
Navigating the aftermath of rate hikes, we’re closely monitoring their latent effects on real estate. Managing variable rate debt is at the forefront of our focus. As we march into an election year where fiscal policy shifts are probable, we’re focused on tax strategy. We encourage a balanced, diversified portfolio and cash reserves to combat unexpected events. – Tammy Trenta, Family Financial LLC
9. Navigate Digital And Infrastructural Flux
While specific investment trends can vary based on economic conditions, geopolitical events and other factors, here are some general investment trends that consumers may consider in the coming year: sustainable and ESG investments, technology and innovation, remote work and digital transformation, healthcare and biotech, infrastructure investments and real estate. – Gianluca Sidoti, The Wealth Company International FZCO
10. Wait To See Artificial Intelligence Impact
AI will increasingly determine investments. It is better to wait and see and not jump on every new trend straight away. AI must first assert itself, especially when it comes to asset management for private individuals. – Thomas Hartmann, Hartmann Coaching GmbH
11. Incorporate Real Estate Into Portfolio
Consumers approaching retirement in 2024 may want to explore alternative investments, with a particular focus on incorporating real estate into their retirement portfolio. Real estate assets have the potential to offer a reliable source of income throughout one’s retirement years regardless of the markets. – Jason Craig, IRA Resources, Inc. (IRAR)
12. Make Informed Decisions
My best recommendation is to make informed predictions in areas that you feel the economy will grow, areas such as renewable energy and clean technologies: With a growing emphasis on sustainability and climate change, investments in renewable energy sources and clean technologies are expected to continue to grow. – Cynthia Dalagelis, Amalgamated Bank
13. Focus On ESG Investments And Financial Literacy
In the upcoming year, consumers should focus on ESG investing and continuous financial education. Investors who prioritize ESG investing (Environmental, Social and Governance) align their portfolios with their values and contribute to positive social and environmental outcomes while still aiming for financial returns. Always consult with a financial advisor for personalized guidance. – Geanette Rodriguez-Ojeda, GRO Accounting and Tax
14. Make Green or Blue Economy Investments
Amid escalating climate risks, consumers should consider green or blue economy investments this year. Green or blue economy investing fuels eco-friendly innovation for long-term growth. Over 70% of the earth is covered by oceans, much of which is unexplored and key to future climate and food solutions. Furthermore, sustainable funds yield traditional returns with less risk, combining prudence and ethics. – Monique Johnson, Beneficial State Bank
15. Take Advantage Of High-Yield Savings Accounts
Leverage high-yield savings accounts for money that you might need in the short-term, but want to boost. This is not an actual “investment” per se—as your money is not invested in stocks or bonds, and deposits are insured up to a certain amount by FDIC. However, anywhere you can earn some extra dollars and put your money to work is a trend worth opting into. – Crissi Cole, Penny Finance
16. Diversify According To Risk Tolerance
While there’s always something new and shiny to attract investors’ attention, the age-old wisdom of a diversified portfolio stands true, year in and year out. With bond yields now higher and cash earning decently, investors can diversify portfolios according to their risk tolerances, without having to be over-concentrated in the equity markets. – Sonya Thadhani Mughal, Bailard, Inc.
17. Utilize The Potential Of Digital Currencies
Explore the potential of digital currencies and continue to monitor tech stocks for growth opportunities. It’s essential to maintain a diversified portfolio to manage risk and stay informed about market developments. – Anthony Georgiades, Innovating Capital
18. Maintain Appropriate Portfolio Balance
Recent increases in bond yields have made them an attractive option for investors. However, we should always be mindful of how much exposure we have to any investment regardless of how attractive it is. Maintaining an appropriate portfolio balance remains the best way to shield investors from becoming too concentrated in a particular asset class. – Justin Goodbread, WealthSource Partners, LLC
19. Invest In Precious Metals
There appears to be a huge shift in precious metals for the preservation of wealth. Holding physical precious metals is a wise strategy for longer-term preservation and short-term gains. – Anthony Holder, C&H Financial Services, Inc.
Source : Forbes
