In this article, we will take a look at the 12 best investments for beginners in 2024. To skip our analysis of the recent market trends and market activity, you can go directly to see the 5 Best Investments for Beginners in 2024.
With the first quarter of 2024 now concluded, the stock market has evolved. Continuing trends from Q4 2023, the period witnessed the sustained growth of artificial intelligence and technology stocks, with investors remaining optimistic about AI’s potential across consumer and business applications, alongside expectations of multiple interest rate cuts by the Federal Reserve throughout the year. However, as we move into the second quarter of the year, investor sentiment has shifted from anticipating a strong economic environment to reassessing strategies for allocating significant funds into the stock market.
In April, U.S. job growth decelerated more than anticipated, with the annual wage increase dipping below 4.0% for the first time in nearly three years, according to the Labor Department’s latest employment report released on April 3. The unemployment rate also rose slightly to 3.9% from March’s 3.8%, attributed to a growing labor supply. Nonfarm payrolls expanded by 175,000 jobs last month, marking the lowest increase in six months, with revisions revealing 22,000 fewer jobs created in February and March than initially reported. Despite these figures, the jobless rate persisted below 4% for the 27th consecutive month.
The signs of a cooling labor market sparked optimism that the U.S. central bank could orchestrate a “soft landing” for the economy, dispelling concerns of stagflation, which had been fueled by reports of subdued economic growth and elevated inflation in the first quarter. In that regard, Federal Reserve Governor Michelle Bowman reiterated her readiness to raise the policy rate if progress stalls or reverses, while expressing confidence that inflation will continue to decline even as the central bank maintains its benchmark interest rate at current levels:
“My baseline outlook continues to be that inflation will decline further with the policy rate held steady, but I still see a number of upside inflation risks that affect my outlook. While the current stance of monetary policy appears to be at a restrictive level, I remain willing to raise the federal funds rate at a future meeting should the incoming data indicate that progress on inflation has stalled or reversed.”
Although inflation has decreased from its peak in mid-2022, it remains significantly above the central bank’s target range. Most reports this year have indicated an annual inflation rate of around 3%, with the Fed’s preferred measure, the core personal consumption expenditures price (PCE) index, recently standing at 2.8%. Rising prices have led to upward pressure on wages, contributing to an inflationary environment that has prevented the Fed from taking aggressive steps to cut interest rates, despite market expectations suggesting otherwise.
If you’re a beginner in the world of investments and finance, diving right in can seem daunting with everything mentioned above. However, there are strategies to simplify the process and increase your chances of success. One approach is to focus on established, well-known companies with strong financial foundations. These household names often offer more stability and growth potential over time. By avoiding riskier investments and sticking to proven businesses, beginners can build a solid foundation for their investment journey and increase their likelihood of early success in the stock market. In that regard, some of the best stocks to invest in 2024 for beginners include the likes of Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Mastercard Incorporated (NYSE:MA), among others listed below.
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Our Methodology
To compile this list, we utilized a stock screener to identify stable companies demonstrating at least low to mid-teens revenue growth. Subsequently, we sorted these companies by market capitalization to prioritize the largest ones. Our selection criteria focused on stocks suitable for beginners, considering both revenue growth and hedge fund sentiment as of the fourth quarter of 2023. The resulting list is arranged in ascending order based on the number of hedge fund holders. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
12. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 103
Quarterly Revenue Growth: 18.17%
Based in New York, JPMorgan Chase & Co. (NYSE:JPM) operates globally across multiple sectors, including Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking, and Asset & Wealth Management.
On March 13, RBC Capital analysts reaffirmed an Outperform rating on JPMorgan Chase & Co. (NYSE:JPM) with a price target of $185.
Insider Monkey’s analysis of 933 hedge fund portfolios for their fourth-quarter 2023 holdings revealed that 103 had positions in the bank. Notably, Ken Fisher’s Fisher Asset Management held the largest stake in JPMorgan Chase & Co. (NYSE:JPM), valued at $2 billion.
Carillon Tower Advisers said the following about JPMorgan Chase & Co. (NYSE:JPM) in its fourth-quarter 2023 investor letter:
“PNC Financial and JPMorgan Chase & Co. (NYSE:JPM) performed well due to more benign inflation data, which the market likely interpreted as a sign that a recession is now less likely to occur. Recall that historically speaking, banks are hyper-cyclical stocks and typically will trade lower if investors foresee a recession, because recessions tend to trigger loan losses.”
Much like Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Mastercard Incorporated (NYSE:MA), JPMorgan Chase & Co. (NYSE:JPM) ranks as one of the best investments for beginners.
11. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 105
Quarterly Revenue Growth: 11.75%
Based in California, Adobe Inc. (NASDAQ:ADBE) is a versatile software company known for its wide range of products and solutions that empower individuals, teams, and enterprises to create, publish, and promote content. Renowned among content creators, students, professionals, and consumers, Adobe Inc. (NASDAQ:ADBE) also operates a Digital Experience segment, serving brands and businesses in managing, implementing, and monetizing customer experiences.
Insider Monkey analyzed 933 hedge fund portfolios for the December quarter of last year and identified 105 shareholders of Adobe Inc. (NASDAQ:ADBE). Ken Fisher’s Fisher Asset Management emerged as the largest investor, holding a stake valued at $2.7 billion.
10. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 105
Quarterly Revenue Growth: 12.69%
Based in Hsinchu, Taiwan, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stands as a leading semiconductor foundry operator, serving over 500 customers and producing more than 12,300 products for diverse applications such as smartphones, high-performance computing, the Internet of Things (IoT), automotive, and digital consumer electronics.
In Q4 2023, Insider Monkey tracked 105 hedge funds holding shares of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), marking it as one of the top choices among our list of 12 hot tech stocks for investment. Ken Fisher’s Fisher Asset Management emerged as the largest hedge fund shareholder, possessing 31.1 million shares valued at $3.2 billion.
Wedgewood Partners, an investment management company, made the following comments about Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), in its Q4 2023 investor letter:
“The Company began shipping chips that were fabricated using its industry-leading “N3” node. Nearly all of the Company’s N3 capacity has been filled by high-end chip designers such as Apple, NVIDIA and even Intel. As high-performance computing, particularly related to AI in both data centers and edge devices, continues to build momentum, the Company will be a key supplier for many years to come. Despite the boom-and-bust cycle in demand seen for many semiconductors during Covid-19 and post-Covid-19, the Company should be able to post solid double-digit growth next year as inventories and end-market demand across most of its technology nodes get back to normal levels. The Company also maintains dominant market share in leading-edge nodes, which is in short supply, given the difficulties its competitors have had in scaling up EUV-based manufacturing. The Company has been able to secure higher prices because of this and can still generate excellent returns on elevated capital expenditures necessary for this scarce capacity.”
9. Berkshire Hathaway Inc. (NYSE:BRK-B)
Number of Hedge Fund Holders: 117
Quarterly Revenue Growth: 19.46%
Headquartered in Minnetonka, Minnesota, UnitedHealth Group Incorporated (NYSE:UNH) stands as a leading American multinational corporation specializing in managed healthcare and insurance services. Operating across four segments—UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx—the company operates as a for-profit entity. Renowned for its robust revenue growth potential, UnitedHealth Group Incorporated (NYSE:UNH) currently offers a quarterly dividend of $1.88 per share as of May 4.
During the quarter, UnitedHealth Group Incorporated (NYSE:UNH) experienced a notable surge in hedge fund interest, with the number of hedge fund positions increasing to 113 by the end of the quarter. This marked a rise from the 104 positions held in the previous quarter, with the combined value of these stakes surpassing $11.1 billion.
8. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 131
Quarterly Revenue Growth: 10.77%
Salesforce, Inc. (NYSE:CRM) shines as a prominent American provider in the world of cloud-based software, specializing in customer relationship management solutions. Offering a robust suite of software and applications tailored for sales, customer service, marketing automation, e-commerce, analytics, and application development, Salesforce, Inc. (NYSE:CRM) caters to a diverse array of business requirements.
Insider Monkey’s analysis of hedge fund activity in the fourth quarter of 2023 unveiled that 131 hedge funds maintained positions in Salesforce, Inc. (NYSE:CRM), reflecting an uptick from 122 funds in the preceding quarter.
7. Mastercard Incorporated (NYSE:MA)
Number of Hedge Fund Holders: 141
Quarterly Revenue Growth: 10.38%
Mastercard Incorporated (NYSE:MA) operates as a transaction and payment processing services company, headquartered in Purchase, New York. Providing integrated products and value-added services for account holders, merchants, financial institutions, and digital partners, Mastercard serves a broad spectrum of clients.
On March 27, Mizuho analysts reiterated a Buy rating and set a $480 price target for Mastercard Incorporated (NYSE:MA).
Insider Monkey’s examination of 933 hedge fund portfolios for their fourth quarter of 2023 shareholdings revealed that 141 funds had invested in the company. Notably, Charles Akre’s Akre Capital Management emerged as the largest investor in Mastercard Incorporated (NYSE:MA), holding shares valued at $2.1 billion.
6. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 166
Quarterly Revenue Growth: 15.44%
Alphabet Inc. (NASDAQ:GOOG), a powerhouse in the technology domain, is renowned for its flagship product, Google, the unrivaled search engine processing billions of daily queries. Its diverse portfolio extends to video streaming and productivity platforms, with YouTube as a standout asset.
Insider Monkey’s analysis of hedge funds through December 2023 revealed that 166 out of 933 held positions in Alphabet Inc. (NASDAQ:GOOG). Leading the pack is Fisher Asset Management, under Ken Fisher’s guidance, with holdings valued at $6.3 billion.
In its Q3 2023 investor letter, Weitz Investment Management, an asset management firm, highlighted a few stocks and Alphabet Inc. (NASDAQ:GOOG) was one of them. Here is what the fund said:
“As for other quarterly contributors, Alphabet Inc. (NASDAQ:GOOG) and Meta Platforms, Inc., (META) added to their exceptional year-to-date returns. Meta Platforms and Alphabet were the true year-to-date standouts. After steep declines in 2022, both stocks rebounded sharply due to a combination of solid fundamentals, disciplined operational execution, and improved sentiment. Despite outsized gains and attention, we think both Alphabet and Meta remain undervalued.”
In addition to Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Mastercard Incorporated (NYSE:MA), Alphabet Inc. (NASDAQ:GOOG) is one of the best investments for beginners in 2024.
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Disclosure: None. 12 Best Investments for Beginners in 2024 is originally published at Insider Monkey.
