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It's been a fun year for growth stocks. In some areas, these have been the most popular stocks to buy. However, in some other sectors, star growth names have disappointed in terms of performance. So when I think about which stocks to buy now for 2024, these are my selective picks.
A contrarian area to consider
The first area I would allocate some of my £1,000 to is retail. This may sound strange, given that pessimists talk about the death of the high street. Of course, consumer demand is greater online, but there is no reason why a company can't offer physical and online capabilities and perform very well.
For example, that is the case of Pets at home. The UK's leading pet supplies retailer continues to grow. The latest first half results showed that consumer income increased by 8.6% year-on-year.
It has a good mix of generating revenue both in-store and online and I don't see this changing anytime soon. People like being able to try and see products (particularly in the pet market), even if they then go online and buy them there. One risk is that consumers will change their spending habits, or tighten their belts if the economy worsens in 2024.
The share price is up 21% over the past year. I feel like there is more potential for this to work next year.
Time to arm yourself
Another growth area I like is aerospace and defense. Let's face it: the need for the government to spend on defense has increased several times over the past year.
Some might think that this is a mature sector with no real growth potential. This is not correct. For example, Babcock International Shares are up 39% over the past year. The company specializes in critical services related to international defense.
With an increase in the order book and recent acquisitions of new contracts, 2024 looks like it could be very profitable for the business. Of course, I am in no way supporting conflicts in wanting to buy stocks. Rather, it is a sad reality that clashes are becoming more pronounced around the world.
However, this sector is competitive, so I would consider spreading my money across two or three stocks to diversify my risk.
Using my £1,000
I'm considering buying the two stocks with some of my available cash. With the total amount, my aim would be to pick four stocks from the two sectors and allocate £250 to each.
The goal here is to have enough in each so that if I see big growth next year, it will make a financial difference to me. At the same time, by dividing the money into different stocks, I reduce the risk of putting everything in the black and coming out in the red.
