Imagine waking up one morning to find your investment portfolio has skyrocketed overnight. Well, for some savvy investors, this dream might become a reality by the end of 2024. I'm Felix and today we're diving into a financial forecast that my rather noisy kitten has dug up that could change the game for 25 growth stocks. But before we unveil these potential gold mines, let's talk about the elephant in the room. interest rates.
Now, I know what you're thinking. Felix, interest rates are about as exciting as watching paint dry. But hear me out, because this seemingly dull topic could be the key to unlocking explosive growth in your portfolio. You see, the Federal Reserve has been playing this sort of high stake game of economic Jenga, carefully stacking interest rates to keep inflation in check.
That they caused, by the way. But whispers in the financial corridors suggest that the tide might be turning. Rate cuts could be on the horizon. And that's where things get interesting for our 25 growth stocks. These aren't just any stocks we're talking about.
These are the undercats, the ones that have been struggling to keep their heads above water in the current high rate environment. But as my trusty financial researcher Tallulah here says, every cat has its day. And for those stocks that might be coming sooner than you think. Now, I know you're itching to know which stocks we're talking about. Are we looking at tech giants ready for a comeback?
FinTech disruptors poised to revolutionize banking? Or perhaps some dark horses from the sectors you'd never expect? Well, hold on to your cats because we're about to embark on a journey through the market that could leave your portfolio looking very different by the time we're done.
But here's the thing. Knowing which stocks might explode is only half the battle. The real question is, how can you position yourself to potentially benefit from this shift in the market? Speaking of positioning, we've also got some rather exciting news. We're up about 85, almost 90% on our teaching portfolio this year.
That's about a $27,000 gain on a $30,000 portfolio. Curious about our secret sauce? Well, Tallulah and I are hosting our first ever two-hour live workshop for beginners and Tallulah will break down our rules. You'll give it all away, won't you?
Yes, yes, she says. And she likes her tummy being massaged. And if you want to join us, head over to felixfrenz.org slash workshop. Grab yourself a free spot and come and join me on Tuesday. Now let's dive into the hot topic that's been on everybody's lips for over a year, rate cuts.
It's like the financial world's version of will they or won't they. And trust me, the suspense is killing more than just market watchers. For months, the Federal Reserve has been playing this high stake game of economic chess.
On one side, we've got inflation, that pesky force that makes your morning coffee a little more expensive each year. And on the other hand, we've got the economic growth of the US, the engine that keeps our financial world spinning. And what's the Fed's job? To keep both in check. without tipping the cat over.
After a period of aggressive rate hikes to combat inflation that the muppets at the Fed caused by printing $4 trillion of US dollars, that's 25% of every dollar in existence by the way, they created that in about a year, I know, whispers of potential rate cuts are growing loud. It's like the first drop of rain after a long drought in California, everyone's perking up. Wondering if this is the start of something big. Meerkats are coming out of their tunnels.
September 2024. That's the month circled in red on many financial calendar. Why? Because that's when most experts believe the Fed might make its first move towards cutting rates.
But hold your horses, we're not talking about a dramatic slasher. The current projections suggest we might see cuts of 25 to 75 basis points, which is... quarter to three quarters of a percent for the whole of 2024. Now you might be thinking Felix, that doesn't sound like much. But in the world of finance, it's not just the size that matters. I know they all say that it's the direction.
Even a small cut can send ripples through the entire economy. Let's break down what these potential cuts could mean. One, a borrowing bonanza. Lower rates mean cheaper loans.
This could spark a surge in borrowing from mortgages to business loans, imagining it as a giant too. an investment injection. When borrowing is cheaper, businesses are more likely to invest in growth. This could mean more jobs, higher wages, and potentially a boost to the overall economy.
Three, a stock market shakeup. Here is where it gets really interesting for us and our 25 growth stocks. Lower rates often lead to investors seeking higher returns in the stock market. It's like a game of musical chess with everybody scrambling for a stock. But everybody's like a game of financial musical chairs with everyone scrambling for a seat in the equity markets.
Then we have the bond market blues. As rates fall, existing bonds become more valuable. This could lead to a rally in the bond market, potentially affecting how investors allocate their portfolios, as in take profits from their bonds, which will now pay less interest, and then take that money and put it into the stock market. And then we got currency concerns. Rates cuts typically lead to a weaker dollar.
For multinational companies, this could mean more competitive exports, potentially boosting their bottom lines. But before we get too excited, let's pump the brakes a bit here. Rate cuts aren't always a clear win.
They can be a double-edged sword and understanding both sides is crucial. On one hand, rate cuts can stimulate economic growth and potentially lead to higher stock prices. Good news for our growth stocks, right? But on the other hand, they're often implemented when the economy is showing signs of weakness. It's like economic medicine.
You don't take it unless something is wrong, and it typically has side effects it didn't tell you about. Let's look at a historical example. Cast your mind back to 2007 to 2009, a period that still gives some investors nightmares. The Fed started aggressively cutting rates in September 2007. as the financial crisis began to unfold. Despite these cuts, though, the S&P 500 took a nosedive, falling a stomach-churning 57% from its October 2007 peak to its March 2009 trough.
But here's where it gets interesting. After hitting rock bottom, in March 2009, the market began a long, steady climb. This recovery period saw some of the most important changes in the S&P 500's history. impressive gains in stock market history.
So what does this mean for our 25 growth stocks? Well, it's not as simple as rate cuts equal instant profits. The impact can vary dramatically depending on the sector, the company's financial health, and the broader economic context. Now, let's take a lap around the market track and see which sectors have been leading the pack in 2024. In pole position, we have the information technology sector. absolutely crushing it with a staggering 57% gain year to date.
It's like the sector strapped a rocket to its back and left everyone else in the dust. Companies in cloud computing, semiconductors and software have been the star performers. Not far behind, we've got consumer discretionary revving its engine with a solid 42% gain in 2023. While it's taken a slight pit stop in 2024 with a 2% dip. It's still holding strong in second place here.
Think e-commerce giants, EV manufacturers. Now, if we look towards the back of the pack, we see real estate chucking along. Managed a respectable 12% gain in 2023, but it's been facing some headwinds this year, down almost 3% so far.
It's like this sector is driving with a handbrake on. Lots of potential, but something is holding it back. But here is where it gets fascinating.
While some sectors are doing victory laps, there are individual stocks within these sectors that seem to be stuck in the pit lane. These underdogs, these potential comeback kids are the ones we're going to focus on today. Why?
Because with the Fed potentially waving the yellow flag and signaling a rate cut, these struggling stocks might just get the tune up they need to roll back on the track. Imagine a race car that's been lagging all season suddenly getting a supercharged engine upgrade. That's the kind of potential we're looking at with these underperforming stocks in a rate cut. I know you're thinking, Felix, how did you sniff out these potential winners? Well, I'd love to say it was all me, but I have to give some credit to my four-legged research team, Winston and, of course, Tallulah, who's now sleeping under the desk.
They both have a pretty good nose for opportunity. But in all seriousness, we've dug deep into market data, analyzed company financials, and looked at historical trends to identify these 25 growth stocks that could potentially explode by the end of 2024. We're talking about companies from various sectors here, from tech giants looking for a comeback to fintech disruptors ready to revolutionize banking and even some dark horses from sectors you might not expect. So are you ready to lift the covers of these potential race winners? Let's dive into our list of 25 growth stocks that could leave the competition in their rear view mirror. First up, we have Tesla.
I know you're thinking, Felix, Tesla, really? But hear me out. Despite its rollercoaster ride, Tesla has been quietly beefing up its production capabilities. And with production cuts, making car loans more affordable, we could see a surge in demand for electric vehicles.
And who's poised to capitalize on that? You guessed it, Tesla. But it's not just about cars anymore.
We've got Tesla's energy storage business that's growing faster than a beanstalk. on steroids and if interest rates drop we could see more homeowners and businesses investing in solar and battery systems. Tesla could be in pole position to benefit from this green energy boom.
Next on our grid we have Coinbase. Now cryptocurrency might seem as volatile as a game of monopoly with your most competitive relatives but hear me out. Coinbase isn't just a cryptocurrency exchange, it's positioning itself as the gateway to the entire crypto ecosystem. Historically, we've seen increased interest in cryptocurrencies when traditional interest rates are low.
People start looking for alternative investments and suddenly Bitcoin starts looking rather appealing. If the Fed does cut rates, which I expect it to, Coinbase could see a flood of new users and increased transaction volumes. Speaking of financial disruptors, let's talk about Robinhood.
Yes, the same Robinhood that took a bit of a beating in 2023. But remember, in the world of investing, today's underdog can be tomorrow's top dog. Robinhood's been quietly expanding its offerings, adding new cryptocurrencies, retirement accounts, and even a 24-7 trading feature. And in a low-interest environment, we could see a new way for retail investors flocking to platforms like Robinhood, looking for higher returns.
Now let's shift gears to e-commerce with Shopify. This Canadian tech darling has had a rough go of it lately, but don't count it out just yet. Shopify's strength lies in its vast ecosystem of merchants. As interest rates potentially drop, we could see a surge in small business creation and expansion, and guess who's likely to be their go-to e-commerce platform?
That's right, Shopify. Next up, we have SoFi. This fintech company has been punching above its weight class, offering everything from student loan refinancing to investment services.
And with its high profile marketing, remember that Super Bowl stadium? And expanding product lines, SoFi is positioning itself as a one-stop shop for millennials'financial needs. If interest rates drop, SoFi could see a boom in loan refinancing and new account opening. Speaking of fintech, let's not forget about Nubank. This Brazilian digital bank has been making waves in Latin America and it's just getting started.
NewBank's low-cost digital-first approach could be a game-changer in regions with traditionally high banking fees. As interest rates potentially drop globally, NewBank could accelerate its expansion plans, tapping into a massive unbanked population. Now let's talk about a name you're all familiar with. PayPal.
Yes, it's had a tough year, it's had a tough couple of years, but don't write off this payment giant just yet. PayPal's Venmo has become practically synonymous with peer-to-peer payments in the US. As interest rates potentially drop and consumer spending increases, PayPal could see a significant uptick in transaction volumes.
Now for something completely different. Archer Aviation. Yes, we're talking about flying taxis.
I know it sounds like something out of the Jetsons, but the future might be closer than you think. Archer is at the forefront of electric vertical takeoff and landing aircraft, EVTO. With lower interest rates, Archer could accelerate its development and production plans.
And it's essentially a high risk, high reward play. But sometimes that's where the biggest gains are found. And of course, all growth stocks tend to get higher valuations when interest rates come down.
And that's got something to do with the way they're valued from their discounted cash flow models. But let's bring it back down to earth with Amazon. And I know you're thinking, Felix, Amazon, isn't that already massive?
But even giants can grow. Amazon's not just about e-commerce anymore. It's cloud computing arm.
Amazon Web Services could see increased adoption as companies invest in the digital transformation. And let's not forget about its growing advertising business, which is already larger than YouTube. In a low interest rate environment, Amazon could double down on its expansion efforts and watch them also for the robotic stuff there.
to. Next up, we've got Paycom. This cloud-based human capital management solution provider has been quietly revolutionizing how companies manage their workforce.
As companies look to streamline operations in a potentially challenging economic environment, Paycom's comprehensive suite of HR tools could see increased demand. Lower interest rates could also fuel merger and acquisition activity, potentially benefiting Paycom as companies integrate new. workforces.
Now let's talk about F5. This networking company might not be a household name, but it's a crucial player in the world of cybersecurity and application delivery. As more businesses move to the cloud and face increasing cybersecurity threats, F5 solutions become more critical than ever.
In a low interest rate environment, companies might be more willing to invest in upgrading their IT infrastructure because money is cheaper and that could potentially benefit. Next on our grid we have UiPath. This company is at the forefront of robotic process automation, essentially software robots that can handle repetitive tasks. As companies look to cut costs and improve efficiency in a potential economic slowdown, UiPath's solutions could see increased adoption. Lower interest rates could also make it easier for companies to invest in automation technologies.
potentially driving UI paths growth further. Let's shift gears to Twilio. This cloud communications platform has become an essential tool for many businesses.
I use it in my businesses. Powering everything from text notifications to voice calls. As business continue to digitize the operations, Twilio services could see increased demand. And in a low interest rate environment, we could see more startups, more small businesses leveraging Twilio's platforms to enhance. customer communications.
Next up, Smartsheet. This collaboration spreadsheet sort of software has been helping teams work together more efficiently, a need that's only growing in our increasingly remote work world. I've actually used Smartsheet for over 10 years in my businesses.
And as companies continue to adapt to hybrid work models, tools like Smartsheet could become even more crucial. Lower interest rates could fuel business expansion and projects initiatives potentially driving increased adoption of Smartsheet's platform. Now let's talk about something completely different. Peakstone Realty Trust.
This real estate investment trust, or REIT in short, focuses on single-tenant properties with long-term leases. While REITs have faced challenges in a high-interest rate environment, a potential rate cut could be a game-changer here. Lower rates could reduce Peakstone's borrowing cost and potentially increase the value of its property portfolio. Next on our grid we have Zoom.
Yes, the same Zoom that became a household name during the pandemic. While Zoom's growth has slowed post-pandemic, don't count it out just yet. The company has been expanding its offerings beyond video conferencing, including phone systems, customer engagement tools, AI tools.
And in a low interest rate environment, we could see increased business formation and expansion. potentially driving demand for Zoom's suite of communication tools. Next, let's talk about HubSpot. This inbound marketing and sales software company has been helping businesses grow their online presence and generate leads for decades. As businesses increasingly shift their marketing efforts online, HubSpot's comprehensive platform could see increased adoption.
Lower interest rates could also fuel startup activity, creating a new pool of potential customers for HubSpot. Now let's head south to Latin America with MercadoLibre, often called the Amazon of Latin America. This e-commerce and fintech company has been growing at an impressive clip. It's one of my favorite stocks.
As e-commerce adoption continues to grow in Latin America, MercadoLibre is well positioned to benefit. Lower interest rates could boost consumer spending, make it easier for MercadoLibre to fund its expansion plans and boost its fintech wing at the same time. Next up, we've got Salesforce.
This customer relationship management CRM giant, whose ticker symbol is literally CRM, has become an essential tool for businesses of all sizes. While Salesforce has faced some headwinds recently, its comprehensive suite of cloud-based tools position it well for future growth. And in a low interest rate environment, we could see increased business investment in digital transformation initiatives potentially benefiting Salesforce, plus we might see significant additional revenues from their AI upgrade offerings.
Let's switch gears to healthcare with Eli Lilly. This pharmaceutical giant has been making waves with his diabetes and obesity treatments. While healthcare stocks are often seen as defensive plays, Eli Lilly's innovative drug pipeline gives it growth potential as well. Lower interest rates could make more people fat. No, that's not how it works.
but it makes it easier for them to fund their research and so on. But no, the real kicker here is, of course, the massive obesity pandemic that's hitting the world from food and drugs and just not moving and people not taking responsibility for their health. And then they just turn to a little pill or a little injection and it fixes everything.
Apparently, no side effects whatsoever. Well, one side effect could be that it boosts your portfolio. So I like Eli Lilly for that.
Now let's talk about... Another way to play the FinTech trend more globally. We talked to quite a lot of FinTech giants The Global X FinTech ETF, ticker symbol FINX. This ETF gives you exposure to a range of FinTech companies from payment processes to online brokerages.
And in a low interest rate environment, we could see increased investment and innovation in this FinTech space that's been hated during this high interest rate period you've been in. So it might be a really easy way with one click to get your hands on some exposure, of course, always do your own bloody research, it's not financial advice. Now, for those of you interested in real estate, you might also want to consider a low-cost ETF, Vanguard Real Estate, ticker symbol VNQ. REITs have struggled in the high interest rate environment, but a potential rate cut could be a significant tailwind.
And this ETF gives you broad exposure to real estate, which could see a resurgence as borrowing costs decrease and property values increase. It's like giving the entire real estate sector a little nitro boost. Now let's shift gears to the financial sector. So not fintech, but just financial sector. And there is another ETF that covers that sector pretty well with very low cost called Vanguard Financials, ticker symbol VFH.
Banks and financial institutions often benefit from a steepening yield curve, which we might see if the Fed starts cutting short-term rates. This ETF gives your portfolio exposure to potential winners in a changing rate environment. Think of it as betting on the pit crew that keeps the whole race running smooth. Now speaking of interest rates, let's not forget about good old US Treasury bonds. Now I know bonds might seem about as exciting as watching paint dry, but hear me out.
When interest rates fall, existing bonds with higher rates become more valuable. The Fed does cut rates, we could see a rally in the bond market. We've already seen one a little bit.
It's like these bonds have been running a marathon and they're about to get their second wind. Last but certainly not least, we have the Vanguard Information Technology ETF. If you just want to get the whole tech sector covered with one click, ticker symbol VGT might be a place you want to look into.
Technology has been the pay sector in the market for years and with good reasons. From AI to cloud computing, tech companies are driving innovation across all sectors. In a low interest rate environment, these companies could find it easier to fund their ambitious projects.
Investing in this ETF could be like backing the entire tech industry to win the race. So there you have it, folks. 25 potential high flyers all revved up and rearing to race. But remember, just like in any race, there is no guarantee you'll cross the finish line first. Each of these stocks and ETFs comes with its own risks and rewards.
And now you might be wondering, Felix, how do I decide which of these races to bet on? Well, that's where your own research and risk tolerance comes into play. play. It's crucial to do your own due diligence and consider how each of these potential investments fits into your overall financial strategy.
Remember, the stock market isn't a sprint, it's a marathon. These stocks and ETFs might not all take off immediately, even if the Fed does cut rates. Some might need time to build momentum, while others might face unexpected obstacles along the way. And that's kind of the exciting part about investing. It's about looking at the long game.
understanding the potential of each company or sector and making informed decisions based on that. The possibility of rate cuts in 2024 could be the green flag that these stocks have been waiting for. Now, I know we've covered a lot of ground here today. We've gone from electric cars to flying taxis, from e-commerce giants to niche software providers. It might feel a bit overwhelming, like trying to keep track of 25 different race cars all at once.
And you might be thinking, Felix, how do I put this into practice? Well, you'd like to join us? Visit felixfrenz.org workshop.
Link is also down below to secure your spot. And remember in the race of investing, knowledge and skills are your fuel. Strategy is your engine and patience is your tireman.
Until next time, this is Felix, Winston and of course Tallulah wishing you a happy investing and an even happier life. What if I told you that man's best friend just uncovered the next big thing in fintech? Yes, I'm probably barking mad, but there is something to this.
My adopted golden retriever Winston has a nose for opportunity and he's just led us to potential gold mine hiding in plain sight. Felix and Winston here and we're gonna dive into why PayPal.