Expert: Robert Silverthorn
Company: Encore- Wealth Management
Phone: (502) 412-4050
Website: Encore Wealth Management Group – Louisville, KY: Ameriprise (ameripriseadvisors.com)
Published on February 16th, 2024
As you evaluate your approach to equities for the year ahead, here are three investing strategies to consider in consultation with an Encore Wealth Management Group financial advisor:
A more panoramic 2024
As we enter 2024, we anticipate the market’s headwinds to recede, potentially benefiting a broader set of companies and sectors, resulting in a more panoramic market leadership theme.
Broadening stock participation in 2024 could include areas of the market that were overshadowed by the AI tech rally last year, including consumer staples, utilities and real estate and small-cap stocks.
Bottom line: In a more “normal” economic environment, consider last year’s laggards, such as bond proxy sectors with solid valuations and attractive dividend yields, as well as the small-cap space for potential outperformance in 2024.
Dividend growth means more in 2024
Dividend strategies struggled in 2023 as cash investments offered an attractive, risk-free opportunity. However, we believe the prospects of a Fed rate cut and lingering inflationary pressures could reinforce the benefits of dividend-paying stocks in 2024.
Focus on dividend growth companies with resilient business models supported by recurring revenues, significant economies of scale and solid free cash flow generation.
Bottom line: As the economy heads toward a “soft landing” and the equity market is potentially poised for a modest return, falling rates and rising dividend income streams could bode well for 2024 total returns.
Quality…with a twist
Given our expectations for lower interest rates and a slower-growth economy in 2024, focus on quality stocks with the added ‘twist’ of recurring revenue or expected earnings rebound.
Bottom line: Two themes could drive outperformance in quality stocks in 2024: Recurring revenue and rebounding earnings. In a more “normal” economic environment, stocks with high recurring revenue may provide greater earnings predictability, while stocks that deliver above-market earnings per share growth could also provide solid returns.
Please feel free to reach out to Encore Wealth Management Group for guidance on how these themes for stock selection can help inform your investment strategy for 2024. Contact us at 502-412-4050 or encorewealthmanagementgroup@ampf.com
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Dean M. Donohue, MBA, CFP®, CRPC™, APMA™, is a Private Wealth Advisor and CEO with Encore Wealth Management Group, a private wealth advisory practice of Ameriprise Financial Services, LLC.) in Louisville, KY. He specializes in fee-based financial planning and asset management strategies and has been in practice for 34 years. To contact him: 502-412-4050 and 9405 Mill Brook Rd, Suite 101 Louisville, KY 40223.
Investment products are not insured by the FDIC, NCUA or any federal agency, are not deposits or obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss of principal and fluctuation in value.
Securities offered by Ameriprise Financial Services, LLC. Member FINRA and SIPC.
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