2024 is the ideal year for investment, whether in stocks or crypto. If you're already a long-time investor, that's great. If you're just about to begin, 2024 might be the best time to start.

It's Obviously a Bull Market

The Nasdaq has surged over 29%, and the S&P 500 has seen an increase of over 22% since last year. Additionally, Bitcoin hit an all-time high of $75,000 back in March. These bull trends are likely to continue. 

I'm not saying that starting your investment journey this year will make you rich—investment always carries risks. However, you shouldn't let this unique investment opportunity slip away.

A New AI Revolution Is Happening, and It's Not the Dot-Com Bubble

The concept of AI has been around since 1950, beginning with Alan Turing's idea of machine intelligence and his Turing Test. You might know Turing from the movie "The Imitation Game." 

However, AI development only truly matured with the advent of smartphones. Over the decades, AI has evolved from early programs to expert systems, machine learning, and neural networks. Innovations like NVIDIA's AI chips have accelerated development, and general-purpose AI technologies, such as ChatGPT, are quickly transforming how AI systems are built and deployed.

Some say AI is just market hype, similar to the dot-com bubble of the 90s, which saw unsustainable increases in stock market valuations for internet companies, many of which had little or no profitability. However, the current bull trend is not driven by unrealistic fledgling businesses. Instead, this AI revolution is led by profit-making tech giants, not cheap unicorn startups.

The Nasdaq surge has been driven by the "magnificent 7" stocks—billion-dollar market cap corporations developing AI and making billions in revenues. For example, Nvidia is making $60.9 billion in 2024, Meta is making $198.3 billion, and Microsoft is making $236.6 billion. Importantly, they are making billions in profits, not losses. This revolution is nothing like the dot-com bubble.

The US Will Likely Have a Rate Cut

Another reason 2024 is an ideal year for stock investment is the strong likelihood of a US rate cut. Cutting interest rates reduces borrowing costs, stimulates spending, and can lead to higher corporate profits and stock prices.

After the coronavirus pandemic, the rate has steadily climbed since March 2022, as the Federal Reserve aimed to combat inflation. The current Fed fund rate is about 5.25% - 5.5%. Investors are expecting a rate cut, likely to happen at the end of this year or the beginning of next year. The Federal Reserve has signaled the possibility of at least one rate cut in 2024 to support economic growth. With inflationary pressures easing and economic indicators stabilizing, a rate cut seems imminent.

Interestingly, even though the current interest rate is very high, stock earnings have been spectacular. Enterprises and corporations in America have adjusted to the 5% interest rate. The Nasdaq has grown 70% since the launch of ChatGPT in November 2022, which is massive growth given the current rate conditions. 

Even interest rate-sensitive small-cap companies have performed well. The Russell 2000 Index, which tracks small-cap stocks in the United States, has grown about 8.34% over the last 12 months. Imagine what will happen if the rate comes down.

2024 Is an Election Year

One thing to know about election years is that they tend to be bullish for the stock market. Historically, the average return on the S&P 500 during election years is 9.5%, and 70% of these years show positive growth. This is largely due to increased investor activity and optimism surrounding potential policy changes.

However, the stock market's reaction to election outcomes can vary based on who wins the election. It’s likely to be Trump vs. Biden, and either outcome will impact the stock market.

Personally, I would bet on Trump being elected due to his corporate tax policies. If Trump wins, investors might anticipate continued corporate tax cuts and deregulation, potentially boosting stock prices. Conversely, if Biden wins, investors might expect increased corporate taxes, which could initially negatively impact stock prices.

In conclusion, 2024 stands out as an exceptional year for investment, driven by a confluence of favorable factors. For those already invested, 2024 could be a year of significant returns. For new investors, this year offers a promising entry point into the market. It's a time to be informed, strategic, and ready to take advantage of the opportunities that lie ahead.

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