Which companies to invest in in 2024?

Investing in the stock market raises both interest and questions, especially on choosing the best companies to maximize returns. In 2024, the financial landscape continues to evolve, offering new opportunities for investors who know how to spot them.

How do stocks generate income?

A share represents a portion of a company’s capital stock, providing a shareholder with a fraction of ownership. Being a shareholder means sharing in the company’s successes and risks.

Shares are accessible through public markets, where they are listed on stock exchanges, allowing easy investment for anyone who wants to participate in a company’s capital.

There are two main ways to generate income from stocks:

1. Create additional value : The difference between the purchase price and the selling price of the stock.
2. Generate dividends : The share of a company’s profits distributed to shareholders.

Some companies reinvest all of their profits to drive growth, while others prefer to reward their shareholders with regular dividends.

Investment sectors will be prioritized in 2024

The CAC 40 broke its historical record, more than 8,000 points – the Paris stock market started the year at 7,530 points.

sector	for what
Technology sector	Big tech companies are under fire from regulators and politicians for their monopolistic position and invasion of privacy. Regulation could affect tech stocks.
Large distribution	Franchise and digitalization are the key words of distribution in 2024. Brands must invest heavily in sustainability and digital technology to remain attractive.
Automobile industry	Electric cars could become affordable by 2024, thanks to economies of scale, evolving battery technology and a price war initiated by Tesla.
Life Sciences	The Belgian biotechnology sector faces challenges such as a lack of qualified labor and increased competition. The government initiative aims to stimulate employment and growth in the sector.
The luxury sector	After three years of recovery, the luxury sector may experience a slowdown in 2024, with growth forecast to be between 4 and 6%. Companies have to innovate to attract customers especially by offering new products.
Banking sector	Rate hikes and government bond issuance are affecting the Belgian banking sector. The big players are showing excellent results, but competition remains strong and financial stability is being tested.
Real estate and construction	The real estate and construction sector is experiencing a slowdown, especially due to rising rates. The expected stabilization of rates may breathe new life into the market, but challenges remain, particularly labor shortages.
Defense industry	Belgium aims to strengthen its industrial capabilities in the defense sector. Agreements are being reached to stimulate industrial activity, but challenges remain in terms of economic benefits and sustainability.
Energy sector	Energy is a strategic sector, with a focus on expanding nuclear reactors in Belgium and calling for tenders for wind farms in the North Sea. Global geopolitical conditions influence energy prices.
Private equity	After a tough year in 2023, private equity may see an improvement in 2024 with a weak but cautious recovery. Positive signs include easing inflationary pressures and resumption of acquisition activities.

Investment Choice: Capital Gains or Dividends?

Your investment strategy may focus on generating capital gains, collecting dividends, or a combination of the two.

Before investing, review the company’s financials, including its debt, profit margin and volatility.

These indicators can help you assess the risk and potential of an investment.

The Price Earnings Ratio (PER) is a key indicator for assessing whether a company is overvalued or undervalued relative to its earnings. A PER in the range of 10 to 15 is generally considered balanced.

Your personal goals greatly influence your investment strategy.

Whether you’re aiming for short-term gains or planning for the long-term, your goals must be clearly defined.