Where to invest in 2024? 10 Asset Classes Overview!

Where to invest in 2024? Here is a 10 asset classes overview.

0:00 Asset Classes
0:15 Stocks
4:17 Bonds
5:45 Gold
9:07 Crypto
10:49 Real Estate
14:18 REITs
14:56 Hedges
17:36 Land
18:07 Commodities
21:24 Emerging
23:03 Alternatives
24:02 Diversification
24:50 Conclusion

Mentioned vids:

Research Platform https://www.youtube.com/watch?v=gmxm5XCbs9A
REITs https://www.youtube.com/watch?v=b-07Qlh-iO0
Spitznagel 1 https://www.youtube.com/watch?v=RDswgDgcby8
Spitznagel 2 https://www.youtube.com/watch?v=ovz_9GF9e-A
Sibanye https://www.youtube.com/watch?v=B2L08l-osCg
Lithium https://www.youtube.com/watch?v=Rbdt0RYuRkA
FMC https://www.youtube.com/watch?v=nYv2Ek_8Gxw

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Good day fellow investors our annual 10 asset classes overview what will work and what want in 2024 but not just asset classes I want to also try to give a solution to what might be the risk and reward out there so let’s immediately start with stocks and if you want a real

Overview of what will the expected returns be going forward this is the seven-year asset class real return forecast by GMO and unfortunately Ely for US Stocks the situation is not positive at all with an expected long-term return of around minus 10 20% from US Stocks small caps a little

Bit better but still just about positive for real returns now why is this such a bad situation because of the stock market’s valuation if you look at the S&P 500 p ratio now we we are at 26.9 compared to an average historical of around 15 which means that if this

Extremely high p ratio reverts just a little bit to the mean over 2024 or over the next few years that means that you are looking into a decline of 20 30 even 40% just from valuation okay but if you look at the earnings yield it is close

To historical lows close to the peak of the dotom bubble in the 2000s and you know how those returns looked then so 3.82 return overtime is not Stellar because if you add one 2% growth over time you get to Long longterm returns of 5% but first the p ratio needs to adjust

And if we look at the cyclically adjusted p ratio that takes into account 10 years of earnings you can see that only a few times in history we have had such a situation now the last two years.com bubble nifty50 bubble and the 1929 stock market bubble and as you can

See history tells us bubble bubble bubble expecting that results now will be different this time is different is not the way a value in investor invests and perhaps the most significant chart that I’ll show you regarding investing in US Stocks now is the following if you

Look at stocks now and want to buy stocks now you have to understand that you are buying here at alltime highs when just 14 years ago the S&P 500 closed at 683 points in March 2009 followed printing money zero interest rates and now we are at a 7x I hope the

Market doesn’t crash for all the people out there invested in the S&P 500 Pension funds a lot of things hang on the S&P 500 but the risk and reward for investing with small zero real returns projected forward and the big downturn risk is not something that I would say

Is a good investment at this point in time we will discuss a little bit later Emerging Markets International markets are valued cheaper so that might be something to think about more about that into the special Emerging Market situation but perhaps this is the most dangerous thing stocks over the last

Little bit more than a year are up 32% and people think yeah stocks can only go up get sucked in but that was the same two years ago and over two years the the S&P 500 did nothing and keep in mind 2022 was one when it crashed

204% so what is the solution now well we don’t have to look far for a solution going into 2024 and the solution depending on your risk and reward is bonds you might feel it strange that I’m saying that bonds are a good asset class for 2024 but if I’m looking at Treasury is

Shortterm treasuries 4% 5% yield I think that if you don’t like the risk and reward out there bonds are a great way to park money until you find something that fits you better of course there are some unknowns with bonds if interest rates go lower the shortterm bonds will

Have lower yields the long-term bonds will however increasing value so you can make some money there if it doesn’t happen you just hold and get that Bond average return out there of course we cannot predict inflation will inflation go higher interest rates higher lower but from a current perspective bonds

From a risk and reward perspective look good until you find something that has a better risk and reward perspective we could say that bonds are cheap but you need to understand what you are doing and let me know in the comments if you need a deeper dive into bonds of course

When it comes to real returns 5% minus inflation 2.8% but still better than what is negative now let’s discuss gold that many see as a hedge to a portfolio in case the FED loses value in case currencies as they are doing with inflation constantly lose more and more

Value now I have been pretty Aid supporter of investing in gold when I started this YouTube channel 2017 18 even a little bit of 19 and then gold started exploding on the FED reverting there asset purchases and then of course with more money in the system it really

Exploded and Peak somewhere in 2020 a little bit lower and now it is peing again however from a current perspective I find gold a little bit risky now because there is still so much money in the system and I feel that this run up is just okay we don’t have anywhere to

Park our money so let’s put it in Gold therefore I would not feel now the same with gold as I did here because here gold was priced at cost of production for the miners now miners should also be making money but that’s not that straightforward the thing with gold is

First is a nonproducing asset and if you want to hedge something in the current environment with money Printing and everything if there is a liquidity squeeze people might also be selling gold instead of buying gold if really a bad situation happens plus if you really want it to act as a hedge you

Need to have a large part of your portfolio it and gold is a nonproducing asset I cannot know whether gold will be $5,000 in 7 years or $1,000 and therefore it’s too risky to consider it as a hedge to your portfolio you can diversify play a little bit

Around on the volatility but to have any kind of significant impact on your portfolio you need too much of it in your portfolio and given that it is a non-producing asset you actually lower your longterm returns if you go into individual miners those have their own issues taxes this

Or that and therefore I feel that gold is not an asset class anymore it’s more like a gambling situation and therefore want to avoid overtime just maybe if there is a clear opportunity okay this is now too cheap crazy cheap but we are not in that situation now and if you look at

Longterm returns bonds have interest rates so those did good over the last 200 years gold didn’t do much and of course stocks are the best because you own businesses and you get the benefit of increased prices through inflation something that bonds don’t give you and gold should give you but you have these

Run up and then 20 years of nothing run up down run up and I don’t know whether there will be 20 years of nothing or it will continue so too much of a gamble for now speaking of Gamble’s cryptocurrencies I was just looking at the energy consumption index for

Cryptocurrencies and this means simply to me that the friction for transaction is pretty high and therefore this will not be a transactional a currency situation and therefore it’s just gambling and yes Bitcoin prices went up because 51% of Americans in May had bought crypto currency for the first time

Within the last 12 months about 46 million Americans own a share of Bitcoin that they didn’t sell so 22% of the edal population and those numbers are huge so a lot of people are dabbling with it let’s call it gambling with it but if you are thinking as an asset class as

Rocken Miller said first if you want to buy 20 million of Bitcoin you can’t so that’s the first thing so a lot of people playing around with it and same with gold if there is a financial squeeze if those bills are coming if this and that and then the trend is

Negative 46 million Americans selling to get the money out that’s not a trend I want to be in that’s again as a portfolio exposure situation simply too risky on why people are buying it simply the greater fo Theory from the mly fool so uh you are hoping that some other not

Call it investor is willing to pay even more at some point in time so have fun but it’s not an asset class now let’s discuss real estate if we look at median price of houses in the United States those have fallen significantly this is a 20% drop

That I see here if I show you a chart better here so from 479,000 to the current 441 rebounded a little bit in the last quarter but when I look at real estate prices now I see this so a huge increase which means that we are still in bubble territory plus if

I look at interest rates the FED situation interest rates now are 5.43% that is not reflected in real estate prices real estate prices should be much much lower given the current situation in interest rates of course everyone is expecting interest trates to go lower and lower and therefore prices

Are holding so in this situation I would call this a real estate bubble therefore very very risky but there is more if you look at the cost of mortgage it went from 3% or 3 4% when I was screaming on this channel to take a 30 year fixed

Mortgage and many of you did it also here in 2021 but now mortgage costs are staggering at 7% 76 7% which makes a huge difference when it comes to investing and even not fixed situations are very risky because you don’t know what will be future interest rates but

Let me just show you the Staggering cost of a mortgage so let’s take $500,000 mortgage an interest rate of seven and the cost is$ 3,721 per month now just a year ago if we compare things and we put an interest rate of free 2,500 free just compare that 3% and 7%

And and home prices have appreciated by 50% if you want to buy it through a mortgage that is insane very expensive too expensive and therefore highly unlikely that you will find a good real estate deal with a 7% mortgage because when it was 3% that was free money

Taking a 3% 30 year fixed mortgage that was free money from the bank from the government inflation free 3% mortgage free money you got your house for free if you did that in the last from 2014 to 2022 and now the situation is completely different plus interest rates are higher

Real estate prices haven’t adjusted so real estate now is a noo unless you can find some staggering deals in the commercial sector where you know what you’re doing but just for investing like this with retail invest inors no what am I saying in the commercial sector this

Is from our re analysis and cap rates there are around 9% so if you have a million you want to park it at 9% get 990,000 per year to live off that might be interesting but you need to know what you are doing with reads those have

Crashed unlike real estate so those are better from that perspective and not to go now deeply into RS this is the video that we discussed reads the details the interest rates what can go wrong what can go right I’ll put all the links in the videos in the description below so

You can check that if you feel you want more information on a certain asset class so with reads to summarize it depends on what you’re looking for the growth The Leverage The Quality quality is still expensive with dividend yield of 23% but check again that video now if

The markets are risky you might consider consider hedging and hedges given the low volatility are not that expensive thus also interesting for those that might want more protection safety or security of course we discussed Hedges a little bit more in detail with Spitz nagles book and also the latest video on

Spitznagle links in the description below but let’s look at the most simple hedging options out there I’ve looked at the S&P 500 option chain so if I want to be hedged for a year then the cost is 4.5% if I want to buy a contract and

Then be protected if the sap 500 goes down I have to pay around 4.5% of my portfolio and then if the S&P 500 goes down the level of my portfolio stays flat if it goes up after 4.5% that you pay now then you made your uh money

After let’s say with interest 5% there you made your money so if stocks just keep going up which is what usually stocks do right then you make above 5% that is the cost if stocks go down after your 5% cut you are protected on the downside but then you have to see okay

How much protection on the downside do I need if you just need a little bit less protection on the downside and you can sustain a 10% crash you say if it goes up and up and down 10% I don’t care but I want to be protected from 10% and

Below you can buy an option that costs 2.4% of your portfolio and then you are for half the cost protected for 90% of the downside and enjoy more upside you you have to see how this fits you more specific hges I have company that will gain on volatility if there is a crash

In my portfolio but that is a little bit more specific so for simple hedging if you want protection if you have a trust that is invested here or there and in the sap 500 and you want to be sure it stays flat and gives you the remaining

Upside then something like this now is rela relatively cheap when volatility increases options on the S&P 500 cost 10% of the portfolio value now let’s discuss land as an asset class I’ve received this suggestion to look a little bit at land and this is okay oil

Boom Shale oil but also Maui land in Hawaii a little bit up and it is a nonproducing asset with 5% interest rates having something just to hold to park your money and then gain on inflation if you don’t have some specific local knowledge it’s not an

Asset class that I would look into but let’s discuss Commodities what is the Outlook there for 2024 if we look at oil we are now at 72 per barrel so that’s somewhere a mid price but with all the electrification coming in I think that

Oil will be trading at 30 or 40 in the future especially given the recent Investments on high prices however this is now a medium risk medium reward situation so not for me natural gas is also a little bit lower 50% down on the long term but that also indicates how

The world’s politics Etc go okay this might be something to look into maybe in the winter we’ll check if after the winter prices go even low lower coal is 63% down but still high on a historical basis so not something that I would jump in now we already discussed gold silver

The average industrial price is 10 to 15 so uh this of course it can go anywhere but not something that I would jump in we just discussed lithium in a video link again will be in description below that has crashed 82% year over year which makes it interesting but still

There is time given the supply and demand Platinum PGM Metals depending on the automotive industry if there is a recession going forward it will be ugly iron ore is still high copper is still high which means that the situation in China is still great talking about emerging markets that we’ll discuss in a

Second so not something very attractive there and if we look at Industrial Metals zinc still high not enough down Cobalt with lithium going down rodium on autoc catalst significantly down and getting closer to normal prices nickel is still up on an average basis aluminium could be interesting at these

Levels we could say fair level but not under valued and copper Futures are actually doing great so things are okay and the things with commodities is that you better wait for a recession and then look into these especially miners producers lowcost producers which is what I do over time and you can follow

What I do in the link in description below where I’ll also put the automotive businesses that I analyzed live and and perhaps something to buy speaking of Commodities is food these are herbicides insecticides but the crash there has already happened and now as there is inventory the stocking it might return

To normality so accept food FMC also link I’ll try to put it here if I remember for the stock not yet the macro is not yet there for Commodities things are still good there is still demand so uh not a situation that is a good risk

And reward except for some food as we discussed in this video now let’s discuss value Emerging Markets emerging value 7% return 5.4% real returns from just emerging small cap International 5% these are good returns and these returns can make good returns for your portfolio over time not these ones and I’ll just

Without going into the specifics I’ll just show you something so everyone is saying the news and media are bombarding us how China is doing terrible China economic growth is 5% and 4% and that’s likely 4% going forward anyone in Europe the US would kill for 4% going forward

But if we look at the Hong Kong Index P ratio forward p ratio is below nine so 8 point something and compare that to the 26 or 22 forward but just those earnings this is the discrepancy between Asia growing billi people etc etc and uh I

Don’t know what to add here you can look at ETFs everything is cheap out there you can check my research platform for more specific stocks to see what I do and uh that’s about it see how it fits you and then you will see if you don’t feel comfortable with Asia with unknowns

With this or that simply as we discussed earlier go back to bonds it’s that that easy you don’t have to invest your money nobody’s putting a gun to your head speaking of guns smoking guns Alternatives we have seen nfts crashing we discussed something that was cool in

22 art but that has also generated just a little bit more than half of the sales compared to 2022 so these are nonproductive assets and not something that I would would be very interested in you can park but usually these things don’t really lead to Great returns all

Those businesses that were touting art last year are probably now half bankrupt we have then private Equity but that has cooled a little bit of and you have to see whether the opportunities are still there the Boom in private Equity when Pension funds started investing there spending your money like there is no

Tomorrow but with a recession if there is a recession private Equity will be even lower so we have already discussed a few asset classes now when it comes to diversification somebody’s saying you should be in all asset classes and that will give you a good return over time

Well I think that now if you’re focusing on re diversification you can diversify by putting the dividence into bonds emerging value or into Hedges and then next year 2025 we will find something else to diversify and then over the long term you have a pretty well Diversified portfolio based on good Returns on

Invested Capital everything else doesn’t give good risk and reward now so diversifying just for the sake of diversification especially at this moment in time is extremely dangerous so when it comes to investing conclusion I think that the key factor here now is the Fed if they lose control it will be

Very very ugly for a lot of things that cannot sustain shocks we can have high inflation going forward or even higher rates depending on what the FED decides likely because higher interest rates cannot be tolerated by governments or companies with huge debts we’re in the greatest debt bubble of all times likely

At some point in time they will have to let inflation loose which then thrashes long-term bonds so that’s also a risk there with bonds but maybe they will not trash it just yet so for parking and then if they start trashing it you buy stocks quickly because stocks should

Then also go lower so you do the opposite of what others are doing everyone thinks there are no issues but first issue is that the rewards are little small over time because everything is so pricey and if things start turning for the worst there risks are huge not worth the reward the

Solution Emerging Markets are cheap of course those can get even cheaper but that is investing if you don’t want to see your money go lower don’t invest spend it enjoy life and that’s it congratulation for reaching this point in the video although bonds Hedges so those are the interesting risk and

Reward situation if you want more check what I do thanks for watching subscribe also for more and I’ll see you in the next video