BFS Highlighted in Nasdaq, Yahoo! Finance Coverage of Setting Investment Goals and Priorities for 2024

Christopher Sargent, portfolio manager and research analyst, Bradley, Foster & Sargent, said that we haven’t seen interest rates this high for quite some time.

“It’s a really great time to invest in safer, higher quality securities. At the same time, investors no longer have to settle for 2% or 3% interest on bonds, so bonds are a much more viable option than they were a few years ago,” he said.

According to him, a good approach can be tiered-out government bonds with a high yield and high safety threshold, especially when coupled with high-quality securities. He described these as “stocks that have a high barrier to entry or an asset that can’t be replicated in the near or even long term tend to have a lower risk profile.”

“For instance, rail freight might have a tough year, but regulation makes it very difficult to build a new railroad, so there’s some degree of stability built in,” he added.

He further noted that there may be opportunities to add bonds from high-quality companies to your portfolio.

“As interest rates have risen, most companies have paused issuing debt. In 2024, I think we’re likely to see quality companies issuing high-paying bonds,” he said. “These can be a good compliment to government bonds in a portfolio. Keep an eye out for bonds from high-quality, profitable companies.”

Mega-Cap Stocks

Mega-cap stocks — stocks of companies that have a market capitalization of $200 billion or more — that are high quality, have great credit ratings and are able to pay a dividend are a good place to look right now, Sargent said.

“Even if the next six months are bumpy, major trends like AI and onshoring are putting a lot of mega-cap stocks in tech and the industrial space in a very strong position to be able to do better two or three years down the line than they are right now,” he said.

This year, roughly 10% said their chief goal is to build a nest egg so they can retire comfortably — that’s double from last year when only 5% said the same.

The renewed interest in retirement planning might come from the stock market’s impressive rebound from an ugly 2022 and new opportunities that the Fed’s anti-inflation measures provided investors this year.

“As interest rates have risen, most companies have paused issuing debt,” said Christopher Sargent, portfolio manager and research analyst at Bradley, Foster & Sargent, a Barron’s Top 100 Registered Investment Advisors firm. “In 2024, I think we’re likely to see quality companies issuing high-paying bonds. These can be a good compliment to government bonds in a portfolio.”

This section is on investing in stable stocks positioned for long-term growth:

About 4%, the smallest share of all, wants to put more money in the stock market next year above all else. A similar percentage said the same at this time in 2022, which was the worst year for the stock market since 2008. Now however, the S&P 500, Dow and Nasdaq are all approaching record highs once again.

It’s likely that investors with cash on hand hear opportunity knocking.

“For long-term gains, high-quality mega-cap stocks that have great credit ratings and pay a dividend are generally a good strategy,” said Sargent. “While there can always be bumps in the short-term, consider which companies are likely to be performing better two to three years out than they are now. Look for major trends such as AI and onshoring that give industries like tech and manufacturing a strong outlook. If a company has a particularly high barrier to entry or an asset that can’t easily be replicated by a competitor, that lowers its risk profile. For example, if rail freight has a difficult year, a competitor isn’t likely to build a new railroad anytime soon, so you can count on a degree of stability.”