These investments are, naturally, at risk of being hit with market volatility, as with any investment, but they offer the potential for more stability during tough financial times.
1. Bonds
Bonds tend to be less volatile than stocks and shares, so they’re always a worthwhile investment if you’re looking for something safer for 2024. Issued by the government, companies and financial organisations, they essentially serve as an IOU to the investor. You lend money to the issuer in return for interest payments during the lifetime of the bond and because you know in advance that you’ll receive a certain return on your investment, they’re also referred to as ‘fixed income securities’.
2. Value stocks
Value stocks are stocks being traded at relatively low costs, which can make them seem like an undesirable option for many investors. But, for those willing to be patient, value stocks could yield you a significant profit in the future because you can buy them at such a low price. Value stocks are great for high-risk investors who want a long-term investment, and since they’re more affordable than growth stocks, they tend to perform better than growth stocks when interest rates increase.
3. Cybersecurity
The global cybersecurity market is expected to exceed £300 billion by 2027, and investors can access this trend via the L&G Cyber Security UCITS ETF. This ETF invests in 45 cybersecurity stocks and since the sector is becoming increasingly important to our everyday lives, transforming how we live and work, investing in this industry is a worthwhile choice.
4. Financially strong companies
It’s hard to predict how the economy will look throughout the year, especially with the diminished spending power of the general public and fluctuating markets. But investing in companies with a strong financial foundation will be safe for investors. Focusing on quality businesses with consistent earnings and how are likely to survive the recession will be worth putting your money into.
5. Electric vehicles
Electric vehicles, or EVs, form a key component of the world’s sustainability efforts and the European Union is set to ban the sale of new petrol and diesel vehicles by 2035, meaning EVs will increase in popularity. One way that investors can access this trend with their investments is via the Global X Autonomous and Electric Vehicles ETF, which invests in companies working within this space. Global EV sales increased in 2020 by 40% and the ETF currently has 76 holdings, with the likes of Tesla, Apple and Toyota included.
6. Property
There’s naturally no risk-aversion when it comes to property, but it’s widely considered to be a relatively safe investment and it can be a potential income stream for you too, in addition to the capital growth opportunities. You may choose to buy physical property, or choose a specialist investment fund that focuses on retail, commercial and industrial buildings. While property is a relatively ‘illiquid’ investment, when the market is performing well, it can be a sound financial investment.
7. High interest current accounts
High interest current accounts, or HICAs, are regulated by the Financial Conduct Authority and UK-authorised banks fall under the Financial Services Compensation Scheme, which protects customers against corporate failure to the value of £85,000.
There may be minimum funding amounts or fees, depending on the provider, but the enhanced rate of interest typically outweighs this so it’s worth checking different providers. Interest rates tend to be low across the board for these types of accounts, but you can earn modest returns even if they don’t necessarily keep up with inflation.
8. Healthcare
Healthcare is a relatively reliable investment, since ageing populations will be spending more even when the economy isn’t thriving. Companies which offer high quality, affordable public health, such as private insurance groups, are a good bet, as well as the likes of Pfizer which has played such a key role in health globally in recent years.
As such a key sector and something which affects everyone globally, it’s a sound investment for 2024. One way investors can access this trend in investments is via an ETF, like the iShares Global Healthcare ETF which follows the S&P 1200 healthcare index. It invests in a wide range of medical devices and healthcare companies, with 114 holdings.
It’s well worth remembering that no investment is entirely risk-free, and the market is always changing, so while these investments are noted for being less volatile, they still come with the potential for losses as interest rates and inflation change.
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