Investment Sectors to Watch in 2024

Which sectors are best for your investment dollars in 2024 will be highly dependent on who you ask and how the year progresses. If you have questions about how to optimize and diversify your portfolio in the upcoming year, it’s likely in your best interest to speak with experienced investment managers and financial advisors.



Technology and AI

There's continued interest in technology, particularly in the realm of generative AI. This sector includes companies developing and utilizing advanced AI technologies. The focus may shift from big tech companies to those specializing in growth sectors like semiconductors and hardware, as well as small and mid-cap companies that offer AI-related technologies at attractive valuations​​​​.

Many companies may also be forced to invest in improving things like cybersecurity and digital infrastructure to counteract greater bandwidth demand and the increasing capabilities of bad actors. 

Healthcare

Many advisors believe healthcare remains a strong candidate for investment, especially companies that provide essential services and equipment. Funding in the healthcare space is expected to return, particularly when it comes to medical equipment and analytical tools. There's also growing interest in companies involved in AI-driven healthcare and medical tech advancements, as well as novel treatments for diseases like Alzheimer's​​​​.

Real Estate

The real estate sector could benefit from an end to the Federal Reserve's hiking cycle or a decline in rates in 2024. This sector might see increased demand for rental housing, making companies involved in home leasing and apartment investments attractive​​​​.

Basic Materials

Companies in the basic materials sector, which produce essential components used across various industries, could see growth as they come out of a de-stocking phase. This sector includes firms specializing in chemicals, metals and other fundamental materials​​.

Semiconductors

Traditional players in the semiconductor space, particularly those involved in memory and personal computing, are expected to see opportunities. Companies that produce industrial-type semiconductors could become leaders if 2024 leads to inventory corrections​​.

Cyclical Sectors

If the U.S. avoids a recession and achieves a soft landing, cyclical sectors like materials, industrials and consumer discretionary could lead. Conversely, if a recession occurs, defensive sectors like healthcare, utilities and consumer staples might be more favorable​​. Investors should be cautious when making assumptions when there are still many unknowns about the upcoming year.

Consumer Services and Hospitality

Depending on how 2024 progresses, there could potentially be growth in the service sector. This could include industries like entertainment, hospitality and leisure, where consumer spending can significantly impact company performance.

Infrastructure Development

Companies involved in the construction, engineering and maintenance of infrastructure projects could benefit from large investments in infrastructure in the United States and globally. This sector covers a range of activities from transportation infrastructure to urban development.

Manufacturing Recovery

You may have seen the term “cardboard box recession” occasionally thrown around in 2023, as well as worries on how it may have been a forbearer of reduced consumer purchases (things typically shipped in cardboard boxes). Potential improvements in cardboard boxes may hint toward strengthening manufacturing companies in 2024, according to some analysts. As with all sectors, growth is never guaranteed, and it will be necessary to watch how the next year unfolds for manufacturing.

Economic Performance May Significantly Influence Your Preferable Course of Action

The best markets for your portfolio may change as 2024 progresses and economic conditions change. There are a variety of macroeconomic factors that influence the performance of different sectors, including things like consumer spending, inflation and interest rates. While Fed announcements and decisions can influence these factors, only time will tell what is going to happen.

For instance, technology and consumer discretionary sectors might thrive if the economy continues to grow, while more defensive sectors like healthcare and utilities could gain favor in a slowing economy. It's also crucial to consider emerging trends, such as advancements in artificial intelligence or shifts in energy sources, which could impact specific industries.

Investors who manage their own portfolios will need to stay informed about these trends and consider how different sectors might respond to ongoing economic changes. This kind of sector analysis can be a valuable tool for making informed investment decisions and diversifying portfolios.

Providing Guidance for Retirement Savers and Investors in Phoenix

Whether you’re a retiree, nearing retirement or busy with everyday life, closely following the health and performance of sectors and making quick, informed decisions might not be the way you prefer to spend your time. Making big investment decisions can have a significant impact on your future, and it’s often beneficial for investors to have an informed and knowledgeable professional in their corner for assistance and guidance.

The team at Fullerton Financial Planning is committed to helping all types of investors navigate the uncertainties of 2024. Don’t hesitate to call us at (623) 974-0300 to speak with an investment manager or financial advisor today.