Recap of My 2023 Stock Picks and Their Performance
Before we dive into my 2024 stock picks, let’s take a moment to review the performance of my annual list of 10 stock selections for 2023. While these picks delivered a positive return in a tumultuous year, they fell short of the benchmark S&P 500 Index, which had a return of 13.1% compared to my collection’s 7.9%.
However, it’s worth noting that over the past decade, the average performance of my stock picks has been an annual gain of roughly 13%, including dividends, compared with less than 12% for the S&P 500. This demonstrates that, while stocks may experience ups and downs, they have proven to be fabulous investments over the long run.
Why Pick Stocks When Index Funds Perform Well?
You might be wondering why you should bother picking stocks when you can simply invest in an S&P 500 index fund and do well in the long term. The answer lies in the potential for higher returns. While index funds are a solid investment choice, picking individual stocks gives you the opportunity to outperform the market.
Additionally, many people find the process of picking stocks intellectually stimulating and enjoyable. It can be a profitable form of entertainment that allows you to engage with the financial markets in a hands-on way. If you enjoy learning about different companies, analyzing their financials, and making informed investment decisions, then picking stocks might be for you.
The Potential of Stocks as Long-Term Investments
Historical data shows that stocks have been excellent long-term investments. Since the start of 1957, the S&P 500 has returned an annual average of 10.2%. At that rate, your original investment doubles in about seven years, and after 30 years, $100,000 becomes $1.6 million.
By investing in a diverse portfolio of stocks, you can harness the power of compounding and potentially achieve even higher returns. While there are no guarantees in the stock market, the data suggests that, over the long term, stocks have the potential to generate significant wealth.
Introducing My 2024 Stock Picks
Now let’s get to my 2024 stock picks. For this year, I have selected a diverse range of companies from various sectors. Please note that these picks are based on my own analysis and research, and you should conduct your own due diligence before making any investment decisions.
The following stocks are my picks for 2024:
- Alibaba Group (BABA)
- ASML Holding (ASML)
- Bank of America (BAC)
- Blue Bird (BLBD)
- Brown & Brown (BRO)
- DraftKings (DKNG)
- Klaviyo (KVYO)
- NVR (NVR)
- ONEOK (OKE)
- Tesla (TSLA)
These companies represent a mix of global giants and up-and-coming players in industries ranging from e-commerce and technology to finance and energy. Each stock has its unique investment thesis and growth potential, but it’s important to conduct your own research and consider diversification when building your portfolio.
Tips and Warnings for Investing in Stocks
Before you invest in any stocks, here are some tips and warnings to keep in mind:
- Consider your investment horizon: Stocks are long-term investments, and you should be prepared to hold them for at least five years.
- Conduct your own research: Supplement the brief descriptions provided here with your own in-depth analysis of each stock.
- Diversify your portfolio: Spread your investments across different sectors and asset classes to mitigate risk.
- Be aware of potential risks: No investment is without risks, and it’s important to understand the potential downside of each stock you choose.
- Stay informed: Keep up-to-date with the latest news and developments in the companies and industries you invest in.
Remember, investing in stocks involves risk, and there are no guarantees. It’s important to make informed decisions based on your own financial situation, risk tolerance, and investment goals. Happy hunting!
*James K. Glassman chairs Glassman Advisory and owns NVR, Tesla, and ONEOK. He can be reached at [email protected].*
*Note: This article originally appeared in Kiplinger’s Personal Finance Magazine, a monthly source of advice and guidance. Subscribe to Kiplinger’s Personal Finance magazine to access more expert insights and make smarter financial decisions.*
Analyst comment
Positive news: The article provides a recap of the author’s 2023 stock picks and acknowledges their underperformance compared to the S&P 500. However, it highlights the long-term potential of stocks as investments and introduces the author’s 2024 stock picks.
Market prediction: The market will likely see increased interest in stock picking as individuals look for opportunities to outperform the market and engage with the financial markets in a hands-on way. Investors may be drawn to the author’s 2024 stock picks for potential higher returns. Diversification and conducting thorough research will be crucial to building a successful portfolio.
