Entering the last week of 2023, the S&P 500 index has accumulated a growth rate of over 23% this year, which is not a big surprise. Its overall growth rate this year is expected to exceed 20%.
From the performance of individual US stocks this year, technology stocks have performed outstandingly.
Technology stocks perform outstandingly
Since the beginning of this year, many technology stocks in the US have performed outstandingly. Nvidia rose over 230%, Meta rose nearly 200%, Uber rose nearly 150%, Chaowei Semiconductor rose over 110%, and Tesla rose over 100%.
UBS analysts say that in the short term, US technology stocks will continue to perform well. Among the 11 stock sectors in the US stock market, technology stocks have the highest return on investment: about 20% in the past 12 months, compared to utility or real estate sectors with a return on investment of 3% -4%. The technology industry also has the strongest balance sheet, with an average net debt to EBITDA ratio of only 0.5 times. With a business model that combines subscription based revenue sources with high growth areas including artificial intelligence, UBS believes that technology companies are expected to achieve healthy profit growth next year.
UBS emphasizes that by 2024, it is expected that economic growth will slow down, and the technology sector will benefit from its high-quality features. Companies with strong return on investment capital, resilient operating profit margins, and low debt levels will stand out. From a historical perspective, these high-quality stocks have performed well during periods of economic slowdown or contraction.
Institution: Follow these opportunities next year
Looking ahead to 2024, international institutions have recently proposed many investment opportunities.
Kristina Hooper, Chief Global Market Strategist at Jingshun, said that most central banks in developed economies around the world are moving in the same direction: the anti inflation process will continue, interest rate hikes have ended, and interest rate cuts may begin in the first half of 2024. It is expected that policies may be unclear for a period of time in the future, or may lead to fluctuations in returns and various assets. However, considering the monetary policy environment, as we enter 2024, global risk appetite is generally positive.
Zehrid Osmani, Global Fund Manager at Martin Kelly, stated: Looking ahead to 2024, the valuations of European and Asian stock markets are more supportive compared to historical levels or other mature market stocks, providing attractive opportunities for investors. Stock prices in both regions are lower than their cyclically adjusted 10-year average and also lower than US stocks. Investors should focus on companies with more resilient profits and strong resistance to downward correction, or companies with the ability to make positive profits and surprise investors Companies, especially those that benefit from structural growth drivers. We have identified three themes with structural growth opportunities, including energy transition, population aging, and artificial intelligence
Ed Perks, Investment Director of Income Investment Strategy at Franklin Templeton, stated: From the perspective of asset allocation, we still have a bullish view on high-quality fixed income assets as their yields and long-term total returns are more attractive. Given that interest rate hikes may put greater pressure on the financial situation of many non investment grade companies, we have appropriately reduced our holdings of high-yield bonds. We continue to diversify our investments into individual stock sectors, which are expected to benefit from the overall upward trend of the stock market and generate returns. In terms of individual stocks, we, Qing "High quality dividend paying stocks with more attractive valuations."