We enter 2023 in the middle of a bear market. He S&P 500The drop in 2022 was the worst since 2008, when it sank 19%. In that context, in January I recommended Top 10 Stocks to Buy in 2023. As we approach the end of the year, these 10 stocks as a group are outperforming the market by 160%.
Let's take a look at these stocks and see which ones should stay on the buy list for 2024 and which ones shouldn't. But first, let's look at why, although not all of these stocks have outperformed the market so far this year, buying them all would have been a great strategy.
The best portfolio is a diversified portfolio.
The 10 stocks I recommended in January were Airbnb (ABNB -0.45%), Amazon (AMZN 1.73%), American Express (AXP 0.92%), Chipotle Mexican Grill (CMG -0.19%), dutch brothers (SIBLINGS -2.61%), Global-e online (GLBE 1.50%), Lululemon Athletica (lulu 0.44%), Marqeta (MQ -1.54%), Free market (MELI 0.17%)and Now holdings (NO -1.66%). Here's how they performed this year compared to the S&P 500.
Someone who had invested $10,000 in the S&P 500 at the beginning of the year would now have $11,990 in price gains. Someone who had invested $1,000 in each of these 10 stocks would have $15,237.
In the article I wrote at the beginning of the year, I explained the reasons why I trusted each of these companies. Most of them met those premises, generating growth and profits. But there are no guarantees in the market. That is why every investor needs a complete portfolio full of winners.
Most investors will want a mix of growth stocks and value stocks to provide balance and position themselves for solid returns in any economic climate. This 10-stock portfolio is heavily weighted toward growth stocks, and that carries a relatively higher level of risk, although the overall risk to the group is minimal in my opinion.
But of any group of 10 stocks, some won't end up meeting expectations. Since you cannot know what they will be, it is best to diversify, which mitigates the risks. Overall, this growth mix was successful and outperformed the market by a wide margin.
Just 10 actions are not enough to add up to one Fully diversified portfolio. Most investors would do better to try to hold around 25 stocks. But these 10 could be the growth portion of that type of portfolio.
With that in mind, let's sort these stocks into two categories: those that are still on the list of top stocks for 2024 and those that I'm removing from my list.
Image source: Getty Images.
Still the best stocks for 2024
I recently compiled a new list of top actions for next year. Shares of Airbnb, Amazon, Global-e, Lululemon, MercadoLibre and Nu are still in it. Not only were they all market leaders in 2023, but the same qualities that made them great candidates last year are still reasons to buy them this year, and I see them as great long-term candidates.
Amazon is recovering, Airbnb and Lululemon are strengthening their dominant positions in the industry, MercadoLibre and Nu Holdings continue to report outstanding growth with solid profits, and Global-e has an incredible market opportunity as it gains customers, generates greater revenue and is approaching profitability. .
Stocks that didn't make the cut
I'm still confident in the other four stocks on my 2023 list, but for next year I've picked four more stocks that I think have tremendous opportunities in both the short and long term. Chipotle has been one of the biggest winners in 2023 and remains a fabulous stock forever. I think Dutch Bros has a fantastic long-term opportunity, but it is dealing with macroeconomic headwinds that are challenging its operations right now, making it riskier than my current top picks. Marqeta is in the same boat: it is struggling in the short term and, although I see it has long-term potential, I am not sure it will materialize in 2024.
Finally, American Express is one of my favorite stocks and the one I have personally owned the longest. I wholeheartedly recommend it to anyone, and it was the only true value stock on the original list, as well as the only one that paid dividends. But since I'm picking stocks that I think can gain the most in 2024, I eliminated them instead of other stocks that could grow faster over the next 12 months.
Check out my new list for 2024 and it may end up outperforming the market next year.
American Express is an advertising partner of The Ascent, a Motley Fool company. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jennifer Saibil He has positions in Airbnb, American Express, Global-e Online, MercadoLibre and Nu. The Motley Fool ranks and recommends Airbnb, Amazon, Chipotle Mexican Grill, Global-e Online, Lululemon Athletica, and MercadoLibre. The Motley Fool recommends Marqeta and Nu. The Motley Fool has a disclosure policy.
