Huge gains and 9% yields: why now’s an amazing time to be a stock market investor

The stock market’s generating fantastic returns in 2024. Whether you’re looking for gains or income, it’s a great time to be an investor.

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Back in late 2023 I said that, heading into 2024, I’d never been more excited as a stock market investor. At the time, I was as bullish as I’ve ever been in 25 years of investing.

Looking back now, my excitement was justified. Because right now, it’s an incredible time to be an investor.

The tech revolution’s creating life-changing wealth

The world today’s currently in the midst of a powerful technology revolution. And this revolution – which is being driven by developments in artificial intelligence (AI) – is creating phenomenal opportunities for investors.

Nvidia (NASDAQ: NVDA) – a stock I’ve been raving about (and been invested in) for years now – is a great example here.

This year, it’s up about 160%. That means a $5k (roughly £4k) investment at the start of the year would now be worth close to $13k – a huge gain in less than six months.

Why is the stock surging like this? Well, Nvidia designs AI chips (and has an 80% share of the market). And right now, demand for these chips – from companies like Amazon, Meta, and Google – is off the charts.

I’ll point out that I don’t expect the stock to keep surging forever. It’s likely to have a pullback at some stage. This could come if demand for its chips suddenly slows.

Taking a long-term view however, I expect it to go higher. Ultimately, this company’s at the heart of the tech revolution.

The next industrial revolution has begun

Nvidia CEO Jensen Huang

Exciting developments in healthcare

It’s not just about technology and AI though. We’re also living in an age of exciting new healthcare developments. Obesity/weight-loss drugs are a good example here.

Obesity’s a massive problem globally, so demand for these new ‘GLP-1’ drugs – which can help people lose nearly 20% of their body weight – is sky-high today.

I’ve been buying shares in Wegovy-maker Novo Nordisk to play this theme. I’ve also been investing in a healthcare fund for more exposure.

It’s worth noting that analysts at Barclays reckon weight-loss drugs could be a $200bn annual market by 2030. They’ve called it the healthcare ‘story of the decade’.

Opportunities for dividend investors

But what if an investor’s seeking income and not looking for growth? Well, there have been amazing opportunities for these investors too in 2024.

Take Legal & General shares, for example. Currently, they offer a dividend yield of about 9%. HSBC’s another stock paying out a lot of income. Currently, its yield is about 7%.

With yields like this on offer, it’s possible to generate a lot of passive income from the stock market right now. Dividends are never guaranteed though.

More gains to come in H2?

As for the stock market outlook for the second half of 2024, I remain bullish. I’m especially bullish on small-cap stocks which have been left behind in recent years as interest rates have risen.

If UK/US interest rates are cut in the second half of the year, I expect a lot of these stocks to soar.

So now could be a good time to take a closer look at this area of the market, I feel.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Ed Sheldon has positions in Amazon, Novo Nordisk, and Nvidia. The Motley Fool UK has recommended Amazon, Barclays Plc, HSBC Holdings, Meta Platforms, Novo Nordisk, and Nvidia. HSBC Holdings 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. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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