As you begin to get your footing in the world of investing, you’ll quickly find two things to be true. First, it’s important to know exactly where things stand today so that you know what you’re up against, what risks to watch out for, and more. But equally key is your ability to anticipate where things are headed – all so that you can hopefully get there before anyone else. That’s what paying attention to investing trends is all about. If you follow current events, you can see which trends are arcing downward, allowing you to avoid them. Thankfully, the reverse is also true. You can get in on something while it’s still in its nascent stages, yielding potentially major returns as a result.
1. The Continuing Power of Real Estate
News came in December 2023 that the Federal Reserve had once again decided to keep interest rates where they were, between 5.25% and 5.5%. More importantly, they also signaled that interest rate cuts could be on the horizon for 2024 – meaning that real estate is about to become an even more attractive investment than it already was.
At the beginning of the pandemic, real estate prices surged thanks in part to historically low interest rates. Flash forward just a few years, and a lack of inventory coupled with significantly higher rates led to a slowdown in activity across the country. That looks poised to change as interest rates come back down again, meaning that wholesale real estate investors, in particular, will want to pay attention.
In a wholesale real estate scenario, you’re acting as what is essentially an intermediary between a seller and a buyer. After getting the seller of a property to agree to one price, you get the buyer to agree to a higher one. The difference between the two is what you get to keep as revenue. That’s an admittedly simplified description of this type of transaction, but the basis is there.
Naturally, the second half of that equation is easier to tackle when interest rates are lower and there is more buying activity. So, you can expect activity to pick up significantly once those (presumed) cuts do go into effect.
2. The Move to Exchange-Traded Funds
Experts agree that another major investing trend that people should watch for in 2024 is moving away from mutual funds towards exchange-traded funds.
Note that much of the activity seen up to this point has been towards index-oriented exchange-traded funds, also referred to as passive ETFs. Despite this, active ETFs have a wide range of benefits that cannot be ignored. Not only do they offer tax efficiency, but they are also great when it comes to transparency.
Additionally, they act as a relatively low-risk form of investment, making them the perfect way to continue diversifying your portfolio and practicing proper risk management whenever possible.
3. An Investment in Cyber Security
If you had to make a list of some of the more pressing issues facing our society today, cyber security would undoubtedly be at the top. According to one study, the average cost of a single data breach hit $4.45 million in 2023. That’s an increase of about $0.1 million from just a year prior.
Every day, businesses and personal users store more information online and in the cloud. At the same time, hacks are becoming more sophisticated, and there is no business too small to become the target of a cybercriminal with malicious intentions. Therefore, making strategic investments in innovative cybersecurity companies is about to become an even more attractive proposition than it already is.
As the digitization of our lives continues, the risk of personal or otherwise confidential information becoming compromised will only increase. This is especially true during a time when cyber actions between nations are on the rise. If you haven’t already looked into making investments in the cybersecurity sector, now would be an excellent time to start.
4. The Enterprise Internet of Things
Finally, another tech-driven investment trend to pay attention to in 2024 has to do with the continued rise of the enterprise Internet of Things, otherwise known as the IoT.
This is made up of two core concepts: the industrial Internet and smart cities. The former relies on a series of countless sensors and other devices that are all monitoring things like industrial equipment. They’re all connected to each other and are sharing data at all times, giving businesses an edge with regard to things like preventative maintenance.
The latter is another area that directly impacts real estate as well. As the Internet of Things is incorporated into smart cities, intelligent design no longer becomes an afterthought. It becomes a core part of new and emerging communities by design. Data is used to strategically build better and more energy-efficient homes and other properties and even dictate how roads should be laid out for the best traffic flow.
As a result, certain areas that may have been neglected in the past will soon be on the rise to prominence. This will open the door for savvy real estate professionals (and investors in general) to assist with this new era of urban development, all while making a profit for themselves at the same time.
Stay Agile and Seek New Investing Trends in 2024
In the end, it’s important to acknowledge that investment trends change on a regular basis. Something considered a cold, hard fact as we enter 2024 may be old and outdated information just a few months later. Things move quickly, which is why you need to be proactive about keeping up, or you will find yourself left behind.
That’s something that seasoned investors all seem to have in common – a willingness to keep learning. The moment you think you know “all you need to know” or that you’re “as good as you will ever be” is when you stop developing. In a space that is in a consistent state of evolution, like investing, that is a dangerous position to be in if you have your attention focused on long-term gains like you should.
Featured image provided by MayoFi; Pexels; Thanks!
