We entered 2023 in the middle of a bear market. THE S&P500The 2022 decline was the worst since 2008, when it fell 19%. In this context, I recommended in January Top 10 Stocks to Buy in 2023. As we head toward the end of the year, these 10 stocks, as a whole, are beating the market by 160%.
Let’s take a look at these stocks and see which ones should be kept on the buy list for 2024, and which ones shouldn’t. But first, let’s look at why, even though not all of these stocks have beaten the market so far this year, buying them all would still have been a great strategy.
The best portfolio is a diversified portfolio
The 10 actions I recommended in January were Airbnb (NASDAQ:ABNB), Amazon (NASDAQ:AMZN), American Express (NYSE:AXP), Chipotle Mexican Grill (NYSE:CMG), Dutch brothers (NYSE: BROTHERS), Global-e online (NASDAQ:GLBE), Lululemon Athletica (NASDAQ:LULU), Marqueta (NASDAQ:MQ), Free market (NASDAQ: MELI)And Currently in portfolio (NYSE: NOW). Here is how they performed this year compared to the S&P 500.
Someone who invested $10,000 in the S&P 500 at the start of the year would currently have $11,990 thanks to price gains. Someone who invested $1,000 in each of these 10 stocks would have $15,237.
In the article I wrote at the beginning of the year, I explained the reasons why I had confidence in each of these companies. Most of them have delivered their results in these premises, generating growth and gains. But there are no guarantees in the market. This is why every investor needs a comprehensive portfolio full of winners.
Most investors will want a mix of growth stocks and value stocks to provide balance and position themselves for strong returns in any economic climate. This 10-stock portfolio is heavily weighted toward growth stocks, which implies a relatively higher level of risk, although in my opinion the overall risk to the group is minimal.
But among a group of 10 stocks, some will not meet expectations. Since we can’t know which ones, it’s best to diversify, which mitigates risk. Overall, this growth mix was successful and significantly outperformed the market.
Just ten actions are not enough to constitute a fully diversified portfolio. Most investors would be better off aiming to own around 25 stocks. But these 10 could be the growth part of this type of portfolio.
With that in mind, let’s put these stocks into two categories: those that are still on the list of top stocks for 2024 and those that I’m removing from my list.
Still the best stocks for 2024
I recently picked up a new list of best stocks for the coming year. The participations Airbnb, Amazon, Global-e, Lululemon, MercadoLibre and Nu still appear there. Not only were they all the best on the market in 2023, but the same qualities that made them great candidates last year remain reasons to buy them this year, and I view them as excellent long-term candidates.
Amazon rebounds, Airbnb and Lululemon strengthen their industry dominance, MercadoLibre and Nu Holdings continue to show exceptional growth with robust profits, and Global-e has an incredible market opportunity by gaining customers, generating higher revenues and moving closer to profitability. .
Actions that were not retained
I still have confidence in the other four stocks on my 2023 list, but for next year I’ve selected four more stocks that I believe offer huge short- and long-term opportunities. Chipotle was one of the biggest winners of 2023, and it’s still a fabulous stock forever. I think Dutch Bros has a fantastic long-term opportunity, but it faces macroeconomic headwinds that are currently challenging its operations, making it riskier than my current top picks. Marqeta is in the same boat: it’s struggling in the short term, and while I see it as having long-term potential, I’m not sure it will come to fruition in 2024.
Finally, American Express is one of my favorite stocks and the one I have personally owned the longest. I wholeheartedly recommend it to everyone, and it was the only true value stock on the original list, as well as the only dividend payer. But because I’m selecting stocks that I think could gain the most in 2024, I removed them in place of other stocks that could grow faster over the next 12 months.
Check out my new list for 2024 and you might just end up beating the market next year.
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American Express is an advertising partner of The Ascent, a Motley Fool company. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Jennifer Saibil holds positions in Airbnb, American Express, Global-e Online, MercadoLibre and Nu. The Motley Fool posts and recommends Airbnb, Amazon, Chipotle Mexican Grill, Global-e Online, Lululemon Athletica and MercadoLibre. The Motley Fool recommends Marqeta and Nu. The Motley Fool has a disclosure policy.
My top 10 stocks to buy in 2023 are beating the market by 160%. Should you buy them for 2024? was originally published by The Motley Fool
