Luis Pazos 
I’ve been investing with Fundrise since 2018. Just a heads-up: if you sign up using my link, I earn a commission, but these opinions are all mine.
Wondering about the best way to invest in 2024? We’ve pinpointed four top investment strategies to match different investor profiles.
Here’s a quick overview of these strategies, highlighting their strengths, typical timeframes, whether they’re active or passive, the knowledge you’ll need, and some potential downsides. Take a look at the table for a summary, then dive into the details below.
Our Top 4 Investment Strategies for 2024
Instead of ranking these strategies, we’ve outlined how each one can benefit different types of investors:
- Value Investing: Great for those who love finding bargains.
- Growth Investing: Best for long-term passive investors.
- Momentum Investing: Perfect for active investors.
- Dollar-Cost Averaging: Ideal for investing consistently in all market conditions.
To start investing, you’ll need a solid platform. Check out the top online stock brokers for beginners and the best investment apps to trade and invest. Understanding brokerage accounts and basic investing can also boost your success.
Ready? Let’s dive into the top four investment strategies for 2024.
Best Investment Strategies
Value Investing: Best for Bargain Hunters
- Investment Timeframe: When bargain stocks show up
- Active or Passive: Semi-Active
- Market Knowledge Required: High
- Downsides: Hard to find good stocks; success isn’t guaranteed
Value investing is all about hunting for underpriced stocks relative to the market or their specific industry. Big names like Warren Buffett use this strategy. Common methods include looking at the price/earnings (P/E) ratio, price-to-book, and price/earnings-to-growth (PEG) ratios. You can invest in value stocks through individual purchases or specialized ETFs. Platforms like TD Ameritrade are good, or you might consider a robo-advisor like Betterment.
Growth Investing: Best for Long-Term Passive Investors
- Investment Timeframe: Constant/always
- Active or Passive: Passive
- Market Knowledge Required: Low
- Downsides: High volatility, no dividends, sensitive to interest rates
Growth stocks are companies that reinvest their revenues for future growth, often offering no dividends. Growth investors focus on long-term gains rather than income. This strategy is typically done via ETFs that emphasize growth stocks. You can use brokers like those mentioned earlier, or consider M1 Finance, which mixes robo-advising with self-directed investing.
Momentum Investing: Best for Active Investors
- Investment Timeframe: During uptrends
- Active or Passive: Active
- Market Knowledge Required: Very high
- Downsides: Hands-on, requires skill, market swings hard to predict
Momentum investing is for those who actively manage their portfolios, buying stocks that are on the rise and selling those that are falling. It’s risky and not for everyone, requiring constant monitoring and the ability to switch strategies quickly. Popular platforms for this strategy include Robinhood.
Dollar-Cost Averaging: Best for Investing in All Kinds of Markets
- Investment Timeframe: Constant/always
- Active or Passive: Passive
- Market Knowledge Required: Low
- Downsides: Requires stable cash flow, doesn’t prevent losses
Dollar-Cost Averaging (DCA) is a simple, passive strategy where you invest a fixed amount regularly, regardless of the market conditions. It’s effective because it reduces the impact of volatility by spreading out your investments over time. Betterment is a good platform for DCA, especially for new investors.
Investment Strategies Guide
Long-Term Investing
Long-term investing is crucial for growing wealth over decades. Key assets include stocks and real estate. You can apply the strategies mentioned above to either individual stocks or ETFs, using self-directed methods or robo-advisors.
Short-Term Investing
Short-term investments serve as your emergency fund, providing liquidity to avoid selling long-term investments at a loss during emergencies. Opt for highly liquid accounts like savings or money market accounts.
The Importance of Diversification
Diversifying your portfolio with a mix of short-term, long-term, and alternative investments like bonds, real estate, and even cryptocurrency can reduce risk. Keeping a portion of your portfolio in safe investments will buffer against market volatility.
Timing Your Investment With Your Goals
Aligning your investments with your long, intermediate, and short-term goals ensures you’re prepared for retirement, major purchases, and even emergencies. Maintaining good credit is also essential, as it impacts your financial health and investment returns.
How We Found the Best Investment Strategies
We evaluated these strategies based on their suitability for various investor types, investment timeframes, active vs. passive nature, required market knowledge, and potential downsides.
Summary of the Best Investment Strategies
To recap, here are the top four strategies we recommend for 2024:
- Value Investing: Best for Bargain Hunters
- Growth Investing: Best for Long-Term Passive Investors
- Momentum Investing: Best for Active Investors
- Dollar-Cost Averaging: Best for Investing in All Kinds of Markets
Consistent participation in any of these strategies will likely yield better results than not investing at all.
Bottom Line: Top 4 Investment Strategies for 2024
The finance world in 2024 presents diverse opportunities. Value Investing is for those who seek undervalued stocks. Growth Investing suits passive, long-term players. Momentum Investing is ideal for active traders. Dollar-Cost Averaging works for consistent investors across various markets. Whichever strategy you choose, staying engaged and aligned with your goals is the key to success.
