You’re Going to Want to Change Your Investment Strategy in 2024

I know I just told you to lay off the trading for the next week or so, but it’s not too early to think about how you’re going to need to change your investment strategy in 2024.

There are going to be some huge opportunities coming to the markets next year.

As I always say, “luck prefers the prepared investor”… so let’s take a minute to talk about how you should be preparing for a different market landscape in 2024.

First, the Fed may have changed everything.

Investors are still cheering about the thought of the Fed taking their hands off the interest rate situation, but there’s a much longer profit play out there for 2024.

We’ve all heard about the “Dogs of the Dow” strategy.

The strategy attempts to maximize the yield of investments by buying the 10 highest-paying dividend stocks available from the DJIA each year.

Now, I’ve never been a Dogs of the Dow guy, but if there’s a year for this strategy to excel, it’s 2024.

Here’s why.

For more than a year, CDs, Treasuries, and even some money market funds have yielded more than 4%, with little-to-no risk. When you compare that to a basket of dividend yielding stocks - say the iShares Select Dividend ETF (DVY) which was losing money for the year until last week – holding dividend stocks turned into a risky proposition.

Why it Matters: With rates moving lower, the risk-reward math will start to favor the dividend yielding stocks heavily in 2024, as income investors are done getting a free ride from the Fed’s higher rates.

My Bottom Line: The “value income” trade may replace the Magnificent Seven as the most popular trade on Wall Street.

That’s a bold statement, but at minimum, I believe that every investor should consider broadening their portfolio strategy to include attractive dividend stocks or ETFs.

Start with the iShares Dividend Select ETF (DVY). Shares are breaking into a long-term bull market trend this month for the first time since February 2023.