2024 Market Recap and 2025 Investment Strategies: Navigating Challenges and Leveraging AI
Good evening, everyone!
I’m excited to be here with all of you at Diamond Ridge Financial Academy to explore cutting-edge investment strategies and ideas. I hope that through our daily learning and practice, we can keep improving our skills, grow our wealth steadily and eventually achieve financial freedom!
Last night, I briefly summed up the global economic situation. It’s clear that change and uncertainty are the norm in the market. For every investor, this is not just a challenge but also an opportunity in disguise. Whether it’s the industrial shifts from technological revolutions or geopolitical changes reshaping the global economy, these seemingly complex trends hold clear investment logic. By focusing on the long-term theme of technological revolutions and building a diversified portfolio around it, stable profits can be achieved.
Going forward, we need to dive deeper into key areas. For example, the potential of AI and blockchain applications, how to balance risk and return through asset allocation and which industries might outperform during potential policy adjustments and market fluctuations in 2025. These are all areas worth keeping an eye on and learning more about.
Some beginners might find investing hard. Even seasoned investors who’ve been in the game for ten years might still be losing money and feel that investing isn’t for non-professionals. If you treat investing as an academic subject, it can indeed seem overwhelming since it involves a wide range of industry knowledge and complex economics. But if you look at it from the angle of making money, it’s actually much simpler. By analyzing past data or events, you can identify a few winning patterns.
For instance, assets that performed well in 2024 are very likely to continue doing well in 2025. Similarly, if we look at how global markets reacted to past interest rate cuts, we can predict the trends for assets during next year’s ongoing rate cuts. So, for most everyday investors, learning a few specific patterns can help achieve stable profits.
Tonight, I’ll sum up the main trends of 2024’s major assets so you can easily catch next year’s investment opportunities. Before we dive into today’s session, let’s first take a quick look back at today’s market performance.
The UK stock market showed strong resilience on the first trading day after Christmas.
In the morning, the FTSE 100 opened lower and showed relative weakness. This was mainly due to two factors: First, the Fed maintained a tough monetary policy stance, signaling limited rate cuts in terms of both frequency and scale next year, which negatively impacts global markets, including the UK stock market. Second, UK retail data during the holiday period was weak, with overall activity down 7.6%, failing to boost market confidence and dampening expectations for economic recovery.
However, the market reversed in the afternoon. Strong performance in the tech and energy sectors helped lift the FTSE 100. But later, dragged down by a sharp drop in US stocks, the index fell again, closing at 8142.45 points.
Despite facing dual pressures from weak UK economic data and a US stock market slump, the UK stock market still showed some resilience today, possibly reflecting investor expectations for favorable economic policies from the UK government in the future.
Looking at the performance of the UK stock market throughout 2024, the FTSE 100 has gained about 5.3% so far this year, marking its fourth consecutive year of growth and its best performance since 2022. Despite economic pressures, the market has shown strong resilience and recovery potential. The standout sectors this year include energy, finance and consumer goods, all benefiting from global economic recovery, improved corporate profitability and better market expectations.
The energy sector was the top performer. Driven by global demand recovery and supply chain adjustments, energy-related assets shined. At the same time, the finance sector steadily climbed amid interest rate adjustments and increased economic activity, while the consumer goods sector attracted funds due to its inflation resistant qualities. These strong performances not only boosted the overall index but also provided clear investment directions for investors.
The main drivers behind the market’s rise can be summarized in three points. First, the gradual recovery of the UK economy, with rebounds in private consumption, corporate investment and public spending, provided a solid foundation for the stock market. Second, while inflation pressures have not fully subsided, the clear downward trend reduced the risk of further monetary tightening, which benefited the market. Lastly, the global economic recovery and stable energy prices boosted market confidence and created a more favorable external environment for businesses.
It’s worth noting that currency fluctuations had a significant impact on investment strategies this year. The pound showed a depreciating trend at certain times, which increased imported inflation pressures but also enhanced the competitiveness of export oriented businesses. Additionally, currency market dynamics led investors to focus more on defensive assets like gold, foreign currency assets and inflation-resistant stocks.
Of course, whether it’s energy, finance or consumer goods, their growth still relies on tech innovation, technological breakthroughs or product upgrades. In 2024, the AI industry, particularly in smart manufacturing, smart finance and the digital economy, grew rapidly. While challenges like geopolitical risks, slowing economic growth and policy uncertainties remain, the UK stock market still holds growth potential given the current valuation levels.
Moreover, the ongoing breakthroughs in emerging technologies like AI and the UK's industry layout in related fields deserve close attention. AI technology is moving from labs to large-scale applications and its enabling effects will significantly boost business efficiency and drive innovation in business models. So, for investors, seizing the core opportunities of the AI revolution could become a major driver of asset growth in 2025.
In 2024, the US stock market had an impressive year, becoming a global benchmark for capital markets. All three major indices saw significant gains, Dow Jones was up nearly 14% for the year, the S&P 500 jumped over 25% and the Nasdaq soared by more than 27%. Tech stocks were the main driving force behind this rally as excitement around artificial intelligence (AI) and the digital economy lit up the market like never before.
Tech was undoubtedly the star of the year. From generative AI to self-driving tech and the integration of big data with cloud computing, giants like NVIDIA, Microsoft and Meta Platforms delivered stellar results. The rapid growth of AI not only changed how tech companies are valued but also boosted productivity across the broader economy.
At the same time, the communication services sector thrived thanks to the rollout of 5G and booming streaming services. Meanwhile, strong performance in consumer discretionary stocks reflected improved consumer confidence and spending upgrades in the US economy. Even the financial sector saw steady growth as better interest rate conditions and a more active market created new opportunities.
The market’s incredible performance wasn’t just fueled by excitement, it was the result of several key factors. First, the Federal Reserve’s shift in policy, including expectations of rate cuts, added liquidity and supported risk assets. Second, the US economy outperformed expectations with strong GDP growth and a solid job market. Third, Trump’s re-election and his pro-business policies, including expected regulatory rollbacks, further boosted confidence. Most importantly, breakout growth in themes like AI and crypto highlighted the limitless possibilities of technological innovation.
For example, Palantir skyrocketed nearly 400% for the year, topping the S&P 500’s biggest gainers as investors chased AI and big data. Meanwhile, SpaceX hit a $350 billion valuation, cementing its leadership in private space exploration and demonstrating how tech is reshaping the economic landscape.
From the above, we can see that the US stock market in 2024 shows far greater investment appeal than the UK stock market. The three major indexes are all up, especially driven by the tech sector. With higher growth rates and deeper structural innovation, the US stock market has further solidified its position as the global leader in capital markets. In contrast, although the UK stock market has shown steady growth, its potential returns still struggle to match the US market due to limitations in economic size, industry structure and innovation strength.
The choice of industries stands out in this comparison. In the US stock market, innovative tech sectors like AI, big data and clean energy continue to lead the way, becoming the focus of market attention. These fields not only align with global tech trends but also deeply influence the transformation of traditional industries.
For example, the widespread use of AI tech has expanded from pure tech companies to manufacturing, healthcare and finance, significantly boosting efficiency and profits. In contrast, although the energy and finance sectors perform well in the UK market, their growth potential and future outlook seem relatively limited compared to emerging tech industries.
This comparison between markets and industries highlights the importance of choice. Investing isn’t just about chasing trends, it’s a process of constantly optimizing decisions. Great investors excel at spotting the most valuable opportunities in complex markets. For instance, choosing to invest in innovation driven companies and industries not only captures current hot trends but also paves the way for future returns. On the other hand, investors who stick to low-growth or mature industries, although they face lower risks, often miss out on higher potential returns.
In actual trading, understanding investment patterns is certainly important, but patience is equally essential. For example, Trump Media & Technology Group (DJT) saw a slight decline today due to the overall pullback in the US stock market, but this fluctuation didn’t change its long-term upward trend. The stock is currently above its 21-day moving average, with short-term support at $35.5. As the adjustment nears its end, it’s expected to regain momentum and investors can continue holding. A similar situation occurred with Coin stock, which temporarily dropped due to the overall market pullback, but its long-term bullish outlook remains strong. For these high-quality assets, we recommend holding firmly and patiently waiting for long-term returns.
At the same time, short-term market fluctuations also provide traders with opportunities to capture price differences. If students wish to use the recent market fluctuations for short-term trades, they can contact the assistant for real-time trading tips. By flexibly responding to short-term fluctuations and seizing trend-based opportunities, investors can maximize returns across different timeframes.
Tonight’s share aims to help everyone better understand that the essence of investment learning is a process of continuously selecting high-quality assets and improving cognitive skills. The market is constantly changing, the economic environment is adjusting and technological advancements are driving industry upgrades and innovations at an exponential speed. In this context, knowing how to choose quality assets and focus on high-growth industries can not only bring substantial returns but also help effectively manage future uncertainties.
In the next lesson, we will continue to summarize and compare the performance of other major assets in 2024, providing a clearer overview of investment patterns. Additionally, starting next month, our chief analyst Professor Hanover will personally explain "Asset Arbitrage Theory," combining the advantages of major investment products to help everyone build a stable and efficient investment portfolio.