Will 2024’s nervous markets throw up decent bargains?

A quarter of the world’s population is going to the polls this year — including elections in America, the UK, and the EU. Political uncertainty makes markets nervous.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

2024 year number handwritten on a sandy beach at sunrise

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Stock markets hate political uncertainty — look no further than the plunging markets that we saw post-referendum, or at the end of Liz Truss’ short-lived premiership.

And this dislike of political uncertainty is unfortunate, because if there’s one thing that it looks as if 2024 is going to major on, it’s political uncertainty.

Major elections in over 60 countries are due to take place in 2024 — making it the biggest election year in history, according to the New Statesman. Overall, it notes, over two billion people are going to go to the polls this year, roughly a quarter of the world’s population.

Passive income stocks: our picks

Do you like the idea of dividend income?

The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?

If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…

Then we think you’ll want to see this report inside Motley Fool Share Advisor — ‘5 Essential Stocks For Passive Income Seekers’.

What’s more, today we’re giving away one of these stock picks, absolutely free!

Get your free passive income stock pick

Markets aren’t too nervous — yet

Now, elections don’t always bring political uncertainty in their wake. Few of us doubt the outcome of the election in Russia, for instance.

But in the economies in which most of us hold our financial assets — the UK, the United States, Europe, and broad chunks of Asia Pacific — elections are by and large free, fair, and unrigged.

So the outcome is always going to be surrounded by some uncertainty.

Markets aren’t especially nervous — yet — with America’s S&P 500 hitting a new record high of 4,840, and the UK’s FTSE 100 trading around the same 7,500 level that it’s been for most of the past few years, pandemic excepted.

But that could — and most probably will — change as we get closer to autumn, when America goes to the polls, and when political pundits reckon Rishi Sunak will likely call an election. The European Union’s elections are even earlier, and just as unpredictable.

Gradual decline, not sudden plunge

How might we expect this nervousness to manifest itself?

In two ways, I think.

First, it won’t be like — say — the sudden crash that we saw post-referendum, or in February and March 2020 as the reality of lockdowns emerged.

Confidence will evaporate more slowly, as the election nears.

Second, there will be moments when markets will take fright, driven by opinion polls, or political candidates’ statements regarding their intentions.

So think of it as a series of descending steps, rather than a vertiginous plunge.

Keep your powder dry

The upshot is clear: investors are being given notice that bargains may well be on offer in the late summer and autumn.

What to do? How to play this?

Right now, I think I’d be tempted to keep my powder dry: hold back some investment capital, so as to be able to take advantage of market developments later.

There are no guarantees, of course, that any bargains will be on offer at all: markets may turn out to be more sanguine about this political uncertainty than I expect.

But I’m guessing that’s unlikely. If nothing else, it’s the sheer scale of what’s going on in 2024 that makes upsets more likely: so many voters, so many elections, and so much existing geopolitical tension as the background.

Good investments — at an even better price

Here at The Motley Fool, we’re mostly patient, long-term, buy-and-hold investors. We look for decent businesses, with decent prospects and decent upsides, and — ideally — with high-calibre managers whose interests are aligned with ours.

And if — as happens — markets conditions operate so as to make the share price a little cheaper than usual, then, hey, we don’t complain.

So a little judicious patience could well turn out to be amply rewarded.

Investing in AI: 3 Stocks with Huge Potential!

🤖 Are you fascinated by the potential of AI? 🤖

Imagine investing in cutting-edge technology just once, then watching as it evolves and grows, transforming industries and potentially even yielding substantial returns.

If the idea of being part of the AI revolution excites you, along with the prospect of significant potential gains on your initial investment…

Then you won’t want to miss this special report inside Motley Fool Share Advisor – 'AI Front Runners: 3 Surprising Stocks Riding The AI Wave’!

And today, we’re giving you exclusive access to ONE of these top AI stock picks, absolutely free!

Get your free AI stock pick

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.

More on Investing Articles

Investing Articles

ChatGPT thinks these are the best stocks to buy for passive income. There’s 1 big problem

Is ChatGPT a useful tool for investors hunting for passive income from the stock market? Based on his little experiment,…

Read more »

Middle-aged white man pulling an aggrieved face while looking at a screen
Investing Articles

5 reasons I won’t buy Tesla shares today!

Tesla shares shrugged off Wednesday's underwhelming results as they continue to power upwards. But a sceptical Harvey Jones says he…

Read more »

Investing Articles

1 AI-powered growth share I just had to buy for my Stocks and Shares ISA!

Our writer reveals an exciting new company in his Stocks and Shares ISA portfolio that he thinks is poised for…

Read more »

Investing Articles

Why did this forgotten FTSE income share suddenly jump 21% in January?

Spirax Group is a top FTSE 100 income share, having hiked dividends for more than 50 years. It's made a…

Read more »

Investing Articles

I think now is the perfect time to consider buying high-yield FTSE dividend shares like Aviva

Harvey Jones has been loading up on FTSE 100 dividend shares over the last year or so, waiting for them…

Read more »

Runner standing at the starting point with 2025 year for starting in new year 2025 to achieve business planing and success concept.
Investing Articles

Scottish Mortgage shares jumped almost 15% in January. Time to consider buying?

Harvey Jones was delighted to see Scottish Mortgage shares end January notably higher despite all the fuss about cheap Chinese…

Read more »

Edinburgh Cityscape with fireworks over The Castle and Balmoral Clock Tower
Investing Articles

ISA millionaires love Legal & General shares – and so do I!

Harvey Jones was pleased to learn that Legal & General shares are top of the pops among ISA millionaires. Better…

Read more »

Close up of manual worker's equipment at construction site without people.
Investing Articles

Can the chancellor’s growth plans send these stocks soaring?

Expanding Heathrow and building a new cancer hospital are on the chancellor’s agenda. But which stocks could be set to…

Read more »