Investors missed out on many great opportunities in 2024

The 2024 investment year is now over. Not a particularly successful year as far as many investors are concerned, but Geert Van Herck, Keytrade Bank's Chief Strategist takes quite a different view. He mainly saw a year full of opportunities and missed chances, including on the European stock markets, despite the many ominous reports in the media. He looks back at the most important investment trends of the past year and points out where things could get interesting in 2025.

"Emotional rollercoaster led to overly defensive investment strategies"

"2024 proved to be a textbook example of how far public opinion can be removed from stock market reality. Numerous media – and many financial experts as well – focused too much on the oscillating global economy."

"They said only Magnificent Seven stocks – the seven major US tech companies including Google and Apple – would do well. The rest of the world, and especially Europe, was going to be hopelessly in pursuit, so to speak."

"But what happened? Against all expectations, the stock markets performed well, also in Europe. The German stock market, still reflecting Europe’s largest economy, led the way. Nevertheless, all this negative news caused a sense of discomfort and even fear among investors. This resulted in an emotional rollercoaster that led to overly defensive investment strategies and therefore a lot of missed returns that were simply there for the taking."

"US success cycle reaches its peak"

"The big lesson investors need to learn from this is that stock market and economic performance are not always automatically aligned. Several studies have already shown this. If the economy is not going well, the stock markets can still perform well, and the reverse is also true."

"What many investors do in times of economic and political uncertainty is still play it completely safe. This is one of the main reasons why investors tend to prefer US tech stocks. These companies are regarded as permanent fixtures, as stable investments."

"Nevertheless, it’s a good idea to keep an eye on the bigger picture at times like these. After all, every stock market success follows a certain cycle. One moment certain stocks reach their peak and the next they give way to another success story the next. For example, since the 2008 financial crisis, US (tech) stocks have performed well compared to the rest of the global stock markets, but we can see that they are reaching their peak."

"This means that there are opportunities for other stock markets, such as the European ones. Then it’s up to investors to put any negative emotions aside and make bold but strategically responsible choices."

"Commodity prices are set to rise again"

"We also notice that the commodity indices may be set for a new rise. Following a sharp surge at the start of the coronavirus pandemic in 2020, these indices flattened out for several years in succession. Now, commodity prices appear to be starting to swell again in combination with expected inflation."

"And in times of inflation, we see that certain types of stocks always tend to do well. In particular, commodities, commodity products and, to a lesser extent, car manufacturers and technology companies. If the expected trends occur, it's therefore a good idea to take this into account for the portfolio of shares."

"Gold stocks performed exceptionally well and crypto is here to stay"

Finally, Geert Van Herck picks out two other remarkable stocks. "In terms of commodities, gold turned out to be one of the best performing shares in 2024. Since economic sanctions were imposed against Russia, many non-Western banks have flocked to the precious metal. But unlike Nvidia shares for example, which flourished with the rise of AI, gold has not attracted masses of average investors."

"And then there’s the crypto story. A great deal has been written about bitcoin and the like, but what has now become apparent is that it is here to stay, for the coming years at least. This expectation gained further traction following reports that future President Trump is planning to invest US reserves in bitcoin and that BlackRock, the world’s largest asset manager, has launched bitcoin ETFs. In short, another interesting month is on its way."

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