How to Beat the Market in 2024

What a year for the stock market! After closing out 2022 down 22%, the S&P 500 rebounded sharply in 2023, finishing up a whopping 24%. Our attention now turns to 2024… Will stocks keep climbing? Are we due for a disappointing year? Here’s what I’m forecasting... A Banner Year Gains of 24% in a single […] You're receiving this email as part of your subscription to Michael Robinson’s Trend Trader Daily [Unsubscribe](. [Trend Trader Daily] How to Beat the Market in 2024 January 02, 2024 What a year for the stock market! After closing out 2022 down 22%, the S&P 500 rebounded sharply in 2023, finishing up a whopping 24%. Our attention now turns to 2024… Will stocks keep climbing? Are we due for a disappointing year? Here’s what I’m forecasting... A Banner Year Gains of 24% in a single year are noteworthy — they’re not exactly the norm. Over the past century, the S&P 500 has returned an average of about 7.5% a year. Factoring in inflation, returns like that may not seem too impressive. But don’t worry. I expect the market to fare well above average this year. And I’ve got my eye on three sectors that could fare even better than the broader market. Profit Sector No. 1: Artificial Intelligence There’s no question that Artificial Intelligence (AI) stocks dominated the investing landscape in 2023. Much of that domination had to do with the release of ChatGPT, the first consumer-facing AI platform, which ignited a firestorm of interest. But keep in mind that when it comes to the AI boom, we’re still in the early stages. Companies are still figuring out this technology and how best to implement it into their businesses. A recent survey by iShares revealed that 70% of executives expect to increase their use of AI in 2024, meaning the technology’s impact is just getting started. One way to play this AI boom is through CrowdStrike (Nasdaq: CRWD). Launched in 2011, it’s a relatively new arrival in the cybersecurity sector. But it’s been employing AI and machine learning as an integral part of its products for the last decade. CrowdStrike is appealing because it’s essentially a “three-fer.” In other words, it covers the vital fields of cybersecurity, AI, and cloud-computing. It’s a leader in securing remote-data centers. And it has 15 petabytes — that’s about 3.7 million movies — worth of information stored in the cloud already. It’s also an earnings monster that recently reported quarterly profit growth of 105%. For the full year, analysts expect profit growth to match that figure. Profit Sector No. 2: Semiconductors With the continued rollout of AI applications will come a big turnaround for semiconductors. You see, the global tech ecosystem must have faster, more robust semiconductors to process the trillions of lines of code that AI applications require. With that in mind, the new year should see a dramatic turnaround from the weak results we saw for the semiconductor sector in 2023. To be fair, we don’t have full-year sector sales at this point. But estimates are around $526 billion for the year — a nearly 12% drop from 2022. With the semiconductor sector poised to rebound, there’s never been a better time to invest in NXP Semiconductors (Nasdaq: NXPI). Based in the Netherlands, this firm makes chips for the automotive, industrial, and communications markets. And over the past three years, it’s grown earnings by an average of 208%. Even trimming this figure back by 75%, we would still see this company’s earnings double in as little as 18 months. And when earnings rise, stock prices often do, too. Profit Sector No. 3: Aerospace & Defense Finally, I’m focused on the aerospace & defense sector. Because as much as I wish it wasn’t, war remains a global event. In Europe, Russia and Ukraine continue to do battle. And in the Middle East, the conflict between Israel and Hamas is likely to stretch well into 2024. It’s no surprise, then, that MarketsandMarkets forecasts that the global defense industry will see sales of more than $2 trillion — much of that coming from U.S. defense and aerospace firms that dominate the industry. That’s why I’m recommending AeroVironment (Nasdaq: AVAV). This company is a world leader in unmanned-aerial vehicles (UAVs), which are critical components for modern militaries. AeroVironment designs user-friendly, rugged UAVs. And its success has cemented the company’s place at the forefront of drone suppliers to the Pentagon, along with more than 50 U.S. allies. Earnings growth for this company has been soft the past few years. But that’s set to change. According to Investor’s Business Daily, per-share profits are forecast to grow by 117%, meaning AeroVironment could deliver investors notable returns this year. Cheers to a Profitable 2024 After a successful rebound last year, I expect the market to enjoy a banner 2024. But remember, our goal is to find opportunities to beat the market. And focusing some of your investment capital into the three sectors (and companies) I mentioned above is a great way to achieve this goal. Cheers to a happy, and profitable, new year. Cheers and Good Investing, [Michael Robinson] Michael Robinson Chief Investment Officer Trend Trader Daily   Copyright © Trend Trader Daily, All rights reserved. You signed up on []( Our mailing address is: Trend Trader Daily 1125 N. Charles Street Baltimore, Maryland 21201 [Update Subscription Preferences]( | [Unsubscribe from this list]( RISK NOTICE: All investing comes with risk. That includes the investments teased in this letter. You should never invest more than you can afford to lose. Please use this research for the purpose that it's intended — as research only. You should consult a professional financial advisor before ever taking a position in any securities you see herein. 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