How To Protect Your 2024 Investments
Smart investment moves to help you navigate a changing economy.
If you’ve scrolled ahead, you might have noticed the layout of our Substack looks a little different. Well, we’ve changed things up to give you more insights on what’s going on in the finance world in additional to practical tips to help you improve your finances.
Here’s what to expect:
📰 Interesting financial news: Stay up to date on what’s happening in the economy.
📈 What’s popping in the stock market: The 411 on trending/interesting stock market news.
📝 This week’s main topic: What this newsletter’s title is about!
🥰 Team CGF’s Amazon favs: Affordable yet helpful Amazon finds.
You ready? Let’s get into it!
📰 Interesting financial news
Hoping to get student loan forgiveness? Don’t miss the April 30th federal loan consolidation deadline. (CNBC)
📈 What’s popping in the stock market
Prefer chicken over mean? Franchise Wingstop’s stock is up 380% (Ticker Symbol: WING) thanks to a consumer preference to chicken over meat and a strong business strategy.
Growth in the U.S. for Lululemon (Ticker Symbol: LULU) has slowed as analysts forecast 12% growth for 2024 compared to it’s historical growth rate of 23% over the past five years.
📝 Main topic: How to protect your 2024 Investments
2024 so far has been a year of many economic and political changes. Given the economy’s ebbs and flows, it’s essential to be mindful and not reactive regarding your investments.
Let’s take a look at what can impact your investments and how to protect them.
What could impact 2024 investments?
With so much happening worldwide, knowing exactly what influences the market can be difficult. Here, we explain which world events may or may not impact your investments.
1. Global instability
The two current wars between Russia and Ukraine and Israel against Hamas have impacted the stock market.
Yet, history has shown that although stocks can fluctuate, overall, the market is resilient during times of war.
For instance, when the invasion of Ukraine erupted on February 24, 2022, the S&P 500 index fell more than 7% after the war broke out. However, the markets rebounded months later, and the S&P reached higher trading levels than before.
2. Inflation
While Inflation is expected to lower in 2024, recent reports show it has not decreased as much as many have hoped.
Inflation is when the overall price of goods increases, and it can impact interest rates on investments, savings, bonds, mutual funds, and CDs. The interest rate of most investments must be adjusted for the rate of Inflation, which can often lower your interest rate.
Regarding the stock market, commodities tend to do well during Inflation as the demand for these commodities, such as energy and oil, tends to go up.
3. Upcoming elections
2024 is an important election year, meaning emotions tend to run high as candidates run their campaigns and citizens decide who to vote for.
While tensions may be high in the political landscape, it’s important not to let those emotions affect your investment decisions.
Potential election outcomes generally have a low impact on financial market performances. Inflation and economic trends tend to have a higher influence on market returns.
4. Big banks going bust
In 2023, we saw the collapse of several major banks. The failures of Silicon Valley Bank, followed by San Francisco-based First Republic Bank and Santa Clara, California-based Silicon Valley Bank, were some of the biggest pitfalls in U.S. history.
While this news may have freaked you out, these bank failures happened for many reasons, including banks’ connections to cryptocurrency, miscalculated risk management, and customer deposit losses. In most cases, the banks gave out more money than they had.
How to protect your investments
When it comes to the economy, unexpected and even disappointing things are bound to happen. And when a crisis strikes, you may feel the need to move your money around and tamper with your investments. However, simply reacting, whether taking out cash or selling different stocks, may hurt your investments in the long run.
Here’s what you can do instead:
1. Diversify
Take a look at your current investments. Do you have all your eggs in one basket? Consider diversifying your portfolio by investing in various assets.
You can expand your portfolio by investing in multiple vehicles, such as Exchange-Traded Funds( ETFs), Real Estate Investment Trusts (REITs), and index funds.
Another diversification strategy is dollar-cost averaging (DCA). With this strategy, you invest your money in equal portions at regular intervals. So, essentially, you’ll invest more when prices are down and less when prices are up.
By following DCA, you’ll create a more balanced portfolio and not invest a large sum of money in a volatile market.
Diversifying your investments lowers the risk of all your investments being impacted by one economic event.
2. Invest in the long-term.
The market can change daily. However, just because a stock might go down one day, there’s a good chance it will go up in the future. Focus on the long-term outcomes instead of making decisions based on day-to-day changes.
Consider investing in growth stocks. These stocks can require a large upfront investment but can have a high return in the long run. For example, Amazon is one of the biggest growth companies.
Bonds are another long-term investment to consider. Think of a bond like an I.O.U. between you, the lender, and whoever's borrowing the cash, be it a company or the government. You essentially loan money to the government or a company, and they promise to pay back your initial deposit plus interest over a period of time.
Although inflation can affect bond interest rates, and the returns can be lower than stock market returns, bonds, particularly government savings bonds, are still considered a relatively safer investment option.
3. Avoid trends
Depending on the market, some stocks might gain popularity and start to trend. For example, Artificial Intelligence (AI) is a trending investment. However, time will tell if these investments will continue to offer a strong return. Therefore, investing in trends can be risky.
Instead, focus on building a diverse and solid portfolio that can, over time, offer you better returns in the future. Additionally, focus on investing in companies you trust and know, rather than companies that seem to be doing well for the moment.
4. Simplify your investments
The three-fund portfolio strategy is a super simple investment strategy that’s been gaining traction. You build your portfolio using just three funds, typically low-cost index funds or ETFs.
These funds cover three main areas:
U.S. Stocks
U.S. Bonds
International Stocks
Since you only focus on three areas, you can diversify without over-diversifying. This simple approach can save you time and energy; you only need to monitor your investments’ performance periodically.
Worrying about your investments is normal between wars, challenging economies, elections, and the ever-changing stock market. However, the best thing you can do to protect your investments is not to be reactive and think about the future.
To become an even smarter investor, make sure you check out our free 7-course bundle on investing.
Here’s to a profitable 2024!
🥰 Team CGF’s Amazon favs
In this section of newsletter today, we’re focusing on helping you organize your home and life by highlighting some affordable items you can purchase to make organizing simple.
Use this list as a guide to help you get ahead on your spring cleaning.
We’ve broken this list down by price point to help you choose items that are within your budget. While looking through items, remember that organizing your finances can help you stay on track with your money goals.
Note: This list contains affiliate links from Amazon. Clever Girl Finance is an Amazon Associate which means we may earn commissions from qualifying purchases. These commissions help us grow!
$30 Organization items
1. Acrylic Jewelry Organizer Box
If you’re like me, you probably have a ton of bracelets, earrings, and necklaces scattered around your room. Even though you love your accessories, keeping your jewelry organized can be a hassle unless you have a nice jewelry organizer like this one!
This organization tool will neatly hold your earrings, rings, necklaces, and bracelets together so you'll know where to find them when you're ready to wear them.
2. NestNeatly SmartCube Underbed Storage Bag
Spring is a great time to declutter and get organized. A simple way to help you get started is with these NestNealty SmartCube Underbed Storage Bags.
These bins can store various items, such as winter clothes, old toys, books, and anything else you’re not currently using. The best part is that they help you take up less space.
$20 Organization items
3. YOOYA LIFE Make-Up Organizers and Storage
This multipurpose organizer is handy for makeup, office supplies, cosmetics, and random knickknacks. It easily fits on countertops and shelves, so it won’t take up too much space and can help simplify your life.
4. Stackable Water Bottle Organizer for Cabinet
Do you have a bunch of water bottles in your cabinet that come tumbling out every time you open the cabinet door? If you’re constantly dealing with an avalanche of water bottles, try this stackable water bottle organizer. It’s a convenient way to store your water bottles so you can quickly grab them when you’re on the go.
5. Vacuum Storage Bags
These bags are some of my favorite organization and track hacks. Perfect for this time of year when we’re starting to pack away our winter clothes, these vacuum storage bags work like magic to help you save space.
Simply fill your bag with clothes, blankets, jackets, and whatever else you want to put away. Then, you can compress the bags to a fraction of their size.
These are great if you don’t have a lot of storage space. I even use them when I travel and want to take a few dozen outfits with me.
$10 Organization items
6. Small Clear Plastic Apothecary Jar Set for Bathroom Canister Storage Organization
This sleek jar set can make any messy area look tidy. The great thing is that you can use them for various small items.
They are great for wrangling up those Q-tips and cotton swabs. They are also great jars for paper clips and other office trinkets. They even make a great storage place for candy and other treats.
7. Dishwasher Safe Silicone Reusable Food Storage Bags
These reusable food storage bags are great for so many things. You can use them for your children’s lunch. They are great for carrying food if you’re going on a hike or having a picnic.
If you’re looking to save money by eating at home more, use these bags to store leftovers when you’re trying to save money and eat in. An added bonus is that they are dishwasher-friendly and better for the environment.
8. Forvencer Accordion File Organizer
A filing folder may not seem like the sexiest purchase, but it can help you organize your papers. This brightly colored file organizer is handy for organizing financial documents such as bank statements, tax papers, contracts, etc.
- - With the right tools, getting and staying organized can be easy. See how easily your life flows once you have everything in place!