he end of the year is often a time of reflection. A chance to look back with the benefit of hindsight. And for us, as investors, it’s always an insightful exercise to consider the events that shaped the stock market in the outgoing year. In doing so, we can better understand what to keep in mind for investing in the new year and what could help us take advantage of investment opportunities in 2024.
3 investment trends from 2023 (that we can carry into 2024)
1. Artificial intelligence has a real impact
What was once considered the realm of science fiction, artificial intelligence (AI) has become a reality in everyday life.
And 2023 may well be considered its ‘breakout’ year.
Artificial intelligence achieved what seemed like almost overnight mainstream adoption and bolstered investor interest. We certainly had many conversations around AI, which materialised in the launch of our own Nemo AI chat. And while ChatGPT’s meteoric growth to over 100 million monthly users in early 2023 fuelled much of the chatter (if you’ll excuse the pun), the investment opportunities in the AI market are far broader.
The global AI market was valued at US$95.6 billion in 2021 and is predicted to reach US$1,847.58 billion by 2030, registering a compound annual growth rate (CAGR) of 32.9% from 2022 to 2030. In fact, companies involved in any business that supports or advances the use of AI are already seeing remarkable growth trajectories.
Nvidia, is one such example.
As a dominant supplier of high-performance hardware, infrastructure, and solutions powering advanced generative AI products, Nvidia has achieved impressive results in 2023. With a whopping year-to-date growth of over 230% (at time of writing) and more than 200% increase over 1-year (also at time of writing), Nvidia has breached a trillion-dollar market cap for the first time and is one of the top performing stocks for 2023.
See Nvidia on Nemo Money.
The opportunities for investment in artificial intelligence are expansive and exciting.
It’s certainly a significant development in technology as almost every industry is bound to be touched by AI over the coming months, years, and decades.
Explore the Top Stocks in AI neme.
2. Big rewards in big tech – this year
While we’ve covered the rise of AI as a significant standalone trend for the 2023 stock market, we shouldn’t forget that artificial intelligence still falls within the broader technology sector. And if market performance is anything to go by, bigger was better when it came to tech in 2023!
Big tech’s ‘Magnificent 7’ stocks – being Alphabet (the company behind Google), Amazon, Apple, Meta Platforms (Facebook and Instagram), Microsoft, Nvidia, and Tesla – are mega-cap companies (with market capitalisations above $200 billion) and leaders in their fields. They generate massive revenue and profits, and the brands are highly trusted by consumers and investors. And they are the stocks that were responsible for most of the US stock market growth in 2023.
But here’s the important lesson from this scenario: it's a tough ask to consistently pick the specific stocks or sectors that will dominate in any particular year.
2018 saw healthcare boom, while energy stocks 'stole the show’ in 2021 and 2022. Today, stocks in both these sectors are listed as some of the worst-performing for the year. But that’s not to say there isn’t value or merit including or retaining these in your portfolio.
While there’s arguably more opportunity to come from the technology sector at large, and the AI industry in particular, the pace and height of growth may slow over time. Or it could come to a sudden halt. Or it could shock markets entirely with a deep and dramatic drop off. The fact is that no-one can predict these events with any real certainty.
What we do know, though, is that with a balanced, more diversified portfolio you stand a better chance of more consistent performance over a longer period.
To help you build your portfolio, Nemo Money sends you notifications about a range of investment opportunities, so you never miss out. Plus, the extensive Overview, News Analysis, and Financials information available in a few taps helps you to easily research the business and decide whether it’s a good fit for you.
3. Crypto performance coupled with regulatory action
It’s been another interesting year for the cryptocurrency industry, with the regulatory US Securities and Exchange Commission (SEC) playing a pivotal role in the prices both plummeting and soaring at various stages.
After the market had a cracking start to the year, the SEC filed charges against Coinbase as well as Binance and its CEO, Changpeng Zhao in June, and prices tumbled. The lawsuits don't impact bitcoin directly, and it rebounded quickly after the initial announcement. But the fact that the SEC is taking two of the largest crypto exchanges to court dampened investor sentiment.
That was until further news involving the SEC emerged.
Also in June, leading investment firm, BlackRock, announced its application to the SEC for a spot bitcoin exchange-traded fund (ETF). And while several applications by other firms have been denied in the past, the market appears optimistic this application will be considered differently. BlackRock has significant status and influence in the financial sector, and CEO Larry Fink has a long history of political involvement too. Both considerable factors when it comes to applications being approved.
While the decision is yet to be confirmed, the fact that the proposed ticker for BlackRock’s bitcoin ETF appeared on the Depository Trust & Clearing Corp.’s (DTCC) website in October, pushed positive investor sentiment and bitcoin price rallied.
When it comes to investment, two aspects of cryptocurrency stand out this year:
- It’s becoming increasingly clear that regulatory action has a direct impact on the market.
- Investor interest in cryptocurrency opportunities remains strong.
In the past, the cryptocurrency market has been subject to speculative hype, with wild price fluctuations, and unregulated businesses running amok. Understandably, this gave the industry an unfavourable reputation, and many prospective investors held back.
Another consideration is institutional investment funds. Without the availability of a secure investment vehicle like an ETF, institutional investment in bitcoin has been stifled. The potentially imminent approval of BlackRock’s spot bitcoin ETF would - finally - give these investors the opportunity they’ve been waiting years for.
As the SEC and other regulators take a more active approach, and provide clearer guidelines on secure investment in cryptocurrency, investors are finding new confidence in investing in the industry. This also means considering options beyond buying coins and looking at the long-term opportunities of investing in the businesses in the crypto space.
UPDATE 11/01/2024: The SEC has APPROVED Bitcoin ETFs and most are already available on Nemo.
Browse the Bitcoin ETFs neme.
In true Nemo style, we have a Crypto neme, featuring a collection of companies involved in cryptocurrency that you can invest in.
Check out the Crypto neme.
Interesting to note: Despite the pending lawsuit, Coinbase has experienced exceptional growth in 2023, reporting over 300% growth for 1-year (at time of writing).
As Coinbase is listed within BlackRock’s application as the custodian of the bitcoin for the ETF. This could be a contributing factor to steady growth. Others have speculated that because the charges against Binance are more severe, and CEO Zhao has stepped down after pleading guilty, Coinbase has benefited from users migrating from Binance.
Irrespective of the specific driving forces behind it’s 2023 growth, Coinbase promotes itself as a pro-regulatory business, which can help ease investor concerns and encourage investment.
See Coinbase on Nemo for updated information.
Looking ahead to 2024
With a fantastic year of investment performance coming to an end, what are the trends, experiences, and lessons you’re going to be carrying with you into 2024? We’d love to hear from you, so follow us on Instagram, TikTok or X (was Twitter) and let us know what your 2024 investment strategy will be.
