Top investment opportunities and risks in 2024

Shafaq News / During 2024, investment opportunities are expected to expand amid projections that the year will witness policy shifts that could open the door to significant financial gains over the long term. 

These opportunities echo widely across previous years, such as the strong surge in all financial assets during the monetary stimulus period witnessed by global economies during the pandemic year. 

Similarly, the dollar's rise with the monetary policy shift in the beginning of the second quarter of 2022 propelled the dollar strongly against major currencies, especially against currencies undergoing stimulus measures like the Japanese yen.

This expansion in investment opportunities coincided with increasing investors or even speculators entering the markets. 

In the Middle East, most Arab countries have seen a significant influx of millennials into the trading world. Simultaneously, brokerage firms rushed to attract these investors by providing diverse offers, including Islamic accounts in the foreign exchange market, among other features.

KEY INVESTMENT OPPORTUNITIES DURING 2024

Despite the first quarter of the current year's end looming, some financial assets are experiencing significant increases that may take years to replicate. 

For instance, gold reached record levels unprecedentedly at $2,222 per ounce, surpassing its previous all-time highs during the pandemic in 2020, as well as during the Russian invasion of Ukraine in 2022, and the third time during the stalling of some small banks in the United States during the second quarter of last year.

Moreover, the cryptocurrency Bitcoin reached levels never seen before, reaching $73,000, surpassing its peak nearly two years ago at $67,000. Meanwhile, stocks on Wall Street recorded their best levels ever, hitting the highest level this year during the third week of March, with analysts expecting continued increases to higher levels.

Wall Street registers record highs, heading for gains for the fifth consecutive month.

Some fluctuations alongside record highs characterized the third week of March. While Wall Street concluded the week's trading session on a mixed note, with the Dow Jones Industrial Average, representing market performance, declining, the S&P 500 index also decreased. However, the Nasdaq Composite index recorded modest gains.

Despite the mixed performance, the weekly performance was strong, with all three major indices posting significant gains. 

The S&P 500 index rose by 2.3%, settling at 5,234.18 points, marking its best week since December of last year. 

The Dow Jones Industrial Average also saw a notable increase of 1.97% to close at 39,475.90 points, while the Nasdaq Composite index stood out as the luckiest index with a substantial leap of 2.85%, reaching 16,428.82 points. Overall, Wall Street seems poised to record gains for the fifth consecutive month.

The market continued to exhibit optimism, supported by the outcome of the Federal Reserve's meeting, despite the widely anticipated decision by the Federal Reserve to maintain interest rates at the same levels. 

However, reassurances from Federal Reserve Chairman Jerome Powell regarding future rate cuts provided significant support for investors. This came amidst concerns about inflationary pressures, as recent data during January and February showed an increase in inflation readings.

REAL INVESTMENT OPPORTUNITIES OR A NEW BUBBLE?

Meanwhile, despite the record levels and outstanding performance on Wall Street, caution was not absent, amid warnings from some experts who maintain a somewhat pessimistic view, drawing comparisons to a bubble that occurred at the beginning of the current century, known as the dot-com bubble. 

Some pessimistic experts also likened the current increases to the 1929 bubble that preceded the Great Depression in the 1930s.

Cautious experts see similarities between the current momentum in artificial intelligence and the prevailing momentum about a quarter of a century ago regarding dot-com technology, especially with the significant rise witnessed by the Nasdaq index, followed by a sharp decline during that period.

While the pretexts from their perspective are similar, fears also arise of a possible market downturn.

In addition to the frenzy of artificial intelligence, experts have not ruled out the impact of the shift in monetary policy with interest rate cuts, as well as expectations of oil prices recording increases, which are expected to affect inflation and economic growth. 

They also warned against aggressive monetary policies that could exacerbate inflationary pressures and lead to inflationary recession.