Best stocks to invest in 2024 for short-term

In the first quarter of 2024, the highfliers of 2023 paused as the market reached a post-rally plateau. The tech and communication services sectors led the way, while traditional havens such as utilities and consumer staples saw their defensive appeal tarnished by whispers of economic recovery.

 Analysts are searching for undervalued small-cap stocks with compelling valuations, suggesting a potential resurgence in the latter half of the year.

While the allure of quick gains in the financial market is tempting, remember that security doesn’t come from shortcuts. Scrutinize investment pitches for disclosure of potential risks and historical performance.  Review our market investigation before buying stocks.  

Choosing to Invest in Short-term

Investment strategies in short-term transcend conventional options and embrace a dynamic approach to the 2024 stock market. These strategies enable swift profits and agile portfolio adjustments, seizing transient opportunities arising from market gyrations.

Investing isn’t a labyrinth to conquer, contributor, but a way demanding clear steps and informed choices. Your decisions should be thoughtful moves, not “calculated maneuvers.” Analyze share price trends, sure, but dig deeper into company reports and understand the global chessboard of trade and politics. Don’t just “keep an eye” on things – actively research, ask questions, and seek professional guidance if needed.

Key Asset Classes at the Start of 2024

1. Growth stocks thrive on swift revenue and earnings growth. Typically, technology stocks, communications services, and consumer discretionary stocks are part of this league of rapid growers.
2. Value stocks, often underrated, have strong fundamentals and growth potential, trading at lower prices relative to their intrinsic value. In 2023, tech growth stocks overshadowed value stocks, with sectors like utilities and consumer staples trailing behind. 
3. Small-cap stocks, having underperformed for years, are now trading at appealing valuations, often prompting investors to seize the opportunity to acquire shares at a discount. 
4. Large-cap techs continued their two-decade winning streak, emerging as the clear winners. In January, although large caps maintained their lead over small caps and mid-caps, there has been some rotation among the top performers within the S&P 500.
5. With U.S. large caps reigning over the global equity markets in the last decade, many investors have questioned the necessity of diversifying into international stocks. Even supporters of broad asset class diversification have experienced non-U.S. stocks consistently weighing down performance.
6. Dividend stocks offer reliable income and can smooth returns in a choppy market, often stemming from well-established large caps. A recent report from Bank of America suggests that 2024 could be a strong year for dividend yield due to: bridging the gap in a muddled market and the potential for increased inflows.
7. Long-term bonds, usually with maturities of 10 years or more, come with both benefits and limitations. They frequently offer higher yields, enabling investors to secure a fixed return over an extended period.
8. Short-term bonds, with maturities typically in the one-to-three-year range, are less sensitive to interest rate changes. However, due to the lower risk associated with these bonds, investors usually receive lower rates.
9. Investors should be aware that high-yield bonds carry more risk than investment-grade bonds when adding them to a portfolio.

Investors frequently utilize commodities to diversify their portfolios and mitigate equity market risk. While commodities vary significantly, such as the differing behavior of oil and wheat futures, both experienced spikes in early 2022 due to supply concerns amid the Ukraine conflict.

10 Top Best Stocks to Buy in 2024

These 10 best stocks offer diverse opportunities for short-term investment.

1. Tesla (TSLA)

Tesla dominates the electric vehicle market, but its future requires a more nuanced analysis. 

Its strength lies in its pursuit of groundbreaking technologies, from Autopilot advancements to battery breakthroughs. However, consistently replicating such innovation can be challenging, and competitors are catching up.

Tesla’s sales figures are impressive, but there are concerns about their long-term sustainability due to their dependence on China’s volatile market and potential saturation in core segments.

Diversification into new markets and models is crucial. Tesla significantly impacts the NASDAQ, but its stock price is also heavily influenced by broader market trends and investor sentiment. Relying only on this index performance for investment decisions could be risky.

1. PayPal Holdings Inc. (PYPL)

PayPal is a significant player in the digital payment space, but it faces competition from constantly innovating fintech rivals. PayPal’s financial health and future prospects beyond just its affordability and stock price. Are PayPal’s growth trajectories sustainable? Has it adapted effectively to emerging trends such as cryptocurrencies and embedded finance?

1. Amazon.com Inc. (AMZN)

Although Amazon’s consistent performance is undeniable, describing it as a “solid pick” solely for short-term gains oversimplifies its complex reality.

Amazon dominates e-commerce, but its true potential lies in its multifaceted approach. Cloud computing (AWS) generates significant revenue and positions Amazon as a leader in the advertising market, where it’s rapidly challenging established giants. AI advancements are fuelling its growth potential.

Short-term gains may be appealing, but Amazon’s future depends on navigating evolving dynamics.

1. Alphabet Inc. (GOOGL, GOOG)

Alphabet dominates the tech industry, but calling it a universal “growth opportunity” without nuance can mislead investment professionals looking for stock recommendations. Here’s a fresh perspective:

Google’s influence across various sectors is significant, but true dominance requires constant evaluation. Cloud computing faces stiff competition from Amazon and Microsoft. Facebook and Apple are competing for market share in digital advertising. Established players pose a challenge to consumer hardware, such as Pixel phones.

1. Airbnb Inc. (ABNB)

Although Airbnb has had a significant impact on the travel industry, more than just potential stock buybacks in 2024 when evaluating its attractiveness.

 Rather than simply calling it a ‘revolution’, it is important to acknowledge the dynamic landscape and the ongoing evolution of competitors like Booking.com and Expedia. Regulatory challenges could impact Airbnb’s operations.

Therefore, it is better to focus on free cash flow rather than guarantees. Airbnb’s strong cash flow positions the company for various strategic moves, including investments in platform improvements, marketing, and geographic expansion. 

Avoid analyzing a company’s future solely through the lens of a single year. It is vital to assess Airbnb’s capacity to navigate industry shifts, adapt to regulatory changes, and sustain growth throughout 2023.

1. Nvidia Corporation (NVDA)

Nvidia is undoubtedly at the forefront of AI technology with its GPUs. However, labeling it a ‘high-quality stock’ solely for growth-oriented investors overlooks crucial factors. 

Nvidia’s growth is significantly driven by AI, but its dominance relies on sustained innovation in a rapidly evolving field. It remains to be seen if the company can maintain its edge against competitors like AMD and Intel. Diversification beyond GPUs is crucial for long-term success.

It has a strong presence in data centers, but it faces fierce competition from established players like Microsoft and Amazon. 

7. Uber Technologies

However, labelling it as pure ‘potential’ for stock picks requires a closer examination.  Uber was undoubtedly an innovative ride-hailing company in its early days. Uber can remain relevant in a rapidly changing transportation landscape with the emergence of self-driving cars, scooters, and evolving customer preferences.

8. Meta Platforms Inc.(META)

Meta Platforms Inc. (NASDAQ: META), formerly known as Facebook, has experienced short-term stock price fluctuations due to investments in new initiatives such as Reality Labs and changes in revenue growth and profits.

9. UnitedHealth Group Incorporated (UNH)

 UnitedHealth Group, a multifaceted US healthcare organization comprising four segments, offers health benefit plans for employers and individuals, Medicaid plans, and children’s health insurance. On January 12, the company disclosed a Q4 non-GAAP EPS of $6.16 and revenue of $94.4 billion. These figures exceeded Wall Street projections by $0.17 and $2.22 billion, respectively, demonstrating a substantial 14% year-over-year revenue growth.  

10. Salesforce, Inc.

 Salesforce, Inc. (NYSE:CRM) stands as a prominent global CRM technology provider, delivering sales tools, a custom app platform, an online learning platform, and Slack for seamless collaboration. Salesforce earned recognition from BofA as a top pick for 2024. Holding a 15% market share and boasting an extensive customer base. Third quarter data from Insider Monkey reveals that 122 hedge funds showcase a bullish stance on Salesforce, with Fisher Asset Management securing the largest stake, amounting to approximately 15 million shares valued at $4 billion.  

As we move past the end of the third quarter of 2023 and into 2024, the stock market presents new opportunities for investors. With a plethora of opinions expressed and analyses conducted, certain stocks have emerged as top picks for the year ahead. Here’s a synthesized list of the 10 stocks to buy in 2024, based on recent expert insights and market trends.

Assess your investing style, establish a budget, and evaluate your risk tolerance. Only after addressing these considerations should you proceed to determine where to allocate your funds, following the prudent advice of The Motley Fool.

Stock Market Risks to Consider

While top performers in 2023 might grab headlines, remember: flashbacks don’t tell the future. Investing isn’t a one-size-fits-all game, and what worked for someone else might leave you stranded. 

Sure, EPS (earnings per share) matter, but they’re just the top of the iceberg. Dig deeper into company reports, trends, global events before pulling the trigger. 

Equities can swing like a rollercoaster, thanks to things like the economy, world events, and even what a company does. And let’s not forget the ups and downs of the Dow and other big indexes, which can make things even more uncertain.

While the price-to-earnings (P/E) ratio is a handy tool, remember: stock valuation goes beyond just one number. At Kiplinger, we see it as a clue, not a definitive answer.

Forecast for 2024

Warren Buffett, one of the most successful investors of all time, is renowned for his value investing approach. Buffett also advises against borrowing money to invest, as this can amplify losses and increase the risk of financial distress. 

In 2023 Bank of America reported a trailing 12-month P/E ratio of 11.07, indicating that it is lower than the S&P 500 index average of 17.67. This suggests that BAC is priced more attractively in relation to its earnings compared to the average stock in the market. Furthermore, BAC’s forward P/E ratio of 9.77, based on anticipated earnings for the next 12 months, implies that analysts expect BAC to grow its earnings at a faster pace than the average stock in the market.

Picking stocks is not an exact science, and there is no guarantee that your investments will pay off. It is important to always conduct your own research, diversify your portfolio, and be prepared for market volatility and uncertainty. Additionally, it is crucial to only invest money that you can afford to lose and not rely on borrowed funds or speculation. As Buffett once said, “Rational people don’t risk what they have and need for what they don’t have and don’t need.