The best ASX shares to buy now in 2024? (September update)

Looking for the best ASX shares to buy for 2024? We've compiled a list of stocks using an algorithm that considers factors such as price performance, volatility levels and profit margins to find 20 stocks that might be worth watching over the year ahead.

Stock themes for 2024

Unless you have a crystal ball, it's impossible to say what the next 6-12 months will look like. But there are some big themes that are currently driving the market in 2024:

• The August stock market crash has left investors jittery
• The risk of recession in the US and elsewhere (including Australia)
• How likely interest rate drops may cause inflation to start rising again
• Commodities continue to outperform

Stocks to watch in 2024

With all that in mind, it's not easy picking quality stocks. To help identify stock picks for 2024, we used Finder's proprietary algorithm to filter Australia-listed companies that have strong fundamentals. We take into account historical prices, dividends, revenue growth, (low) price volatility and profit margins, which might indicate a quality stock.

To avoid speculative stocks, we only include companies with a market cap of more than $1 billion. We filtered out stocks that have been listed on the ASX for less than 5 years to better compare historical data.

Again, this doesn't mean these are the best ASX stocks for you or your personal situation. Always do your own research and chat with a professional when in doubt.

The algorithm was last updated 02 September 2024.

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Did you know?

You could save $1,046 a year on average in brokerage fees by switching to a more suitable online broker, according to Finder research. You might even save money by having more than one platform, especially if you are investing both in Australia and internationally.

Buy ASX stocks through a broker

Important: The standard brokerage fee displayed is the trade cost for new customers to purchase $1,000 of either Australian or US shares. Where a platform charges different fees for both US and Australian shares we show the lower of the two. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.

How to pick stocks

There's no single winning strategy to filter "good stocks" because the most important consideration is your own circumstances. Besides, the best ASX stocks are those that perform well in the future. And if the last few years has taught us anything, markets can defy expectations.

But that doesn't mean you shouldn't do your homework. Whether you care more about short-term capital gains or long-term dividend growth, it's important to know whether a stock is performing well, making a profit, paying dividends or going backwards.

What are some stocks to watch?

Michael Gable
Managing Director, Fairmont Equities

I will be focusing on resource stocks due to demand for commodities, supply constraints, and a falling US dollar. Gold should also do well, but investors need to remember that it is not a hedge or a long-term investment. You only hold it when the US dollar is falling. That should happen but don't fall in love with it, you need to trade it and remain nimble.

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What's been happening in the market?

The past couple of years have been marked as some of the most volatile periods in stock market history. This volatility was largely driven by persistent inflation, rising interest rates, and soaring commodity prices, significantly influenced by the geopolitical tensions and conflicts across different regions.

Interestingly, this period saw a unique trend where bad economic news, such as a slowdown in GDP or a rise in unemployment, was often viewed positively by investors as potential indicators of peaking inflation.

Key attributes to consider in 2024

These issues remain central to market dynamics, but signs of inflation possibly stabilising have emerged. This has led global central banks to stay alert, continually adjusting interest rates to manage the economy effectively.

During these times of uncertainty, certain sectors such as commodities, real estate, and industrials have traditionally been perceived as safe havens. Consequently, these sectors were notably dominant in the market throughout the past year.

The way investors responded to these market conditions varied significantly, heavily influenced by their individual investment strategies. Long-term investors, with ample time before needing to liquidate their shares, might have perceived this market environment as an opportunity to invest in undervalued stocks and ETFs, potentially ripe for improvement during such volatile times.

On the other hand, specific investor groups, including older Australians requiring immediate funds, active traders, and those with readily available cash reserves, might have monitored the market more closely.

This cautionary approach was often adopted by those seeking immediate returns or needing to manage their investment risks more actively in the face of ongoing market fluctuations.

Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, options or any specific provider, service or offering. It should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involve substantial risk of loss and therefore are not appropriate for all investors. Past performance is not an indication of future results. Consider your own circumstances and obtain your own advice before making any trades.

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Frequently asked questions

• Where can I invest $5,000 in Australia?

  If you have $5,000 you'll actually have a number of options as to where you want to invest it. These can range from having it in a high interest savings account, to superannuation, P2P platforms, or even buying shares/ETFs or robo advisers.

  If you would like to see more, head over to our page about how to invest $5,000 to see how you could be making your money work harder for you.

• Will stocks boom in 2024?

  Nobody really knows how the share market will perform over the short term, although active traders will try to exploit these movements. If you are a long-term accumulator of assets you might not need to focus on whether or not stocks boom in 2024.

• What is the most expensive stock on the ASX?

  The most expensive stock on the ASX quite frequently fluctuates, but as of 6 August 2024, the most expensive stock was Cochlear (COH) followed by CSL (CSL) and Macquarie Group (MQG).

• When is the best time to buy stocks?

  Generally speaking "time in the market beats timing the market". This means when it comes to buying stocks, you're usually better off consistently dollar cost averaging into the shares regardless of the stock price or market backdrop. Although there's a big caveat to this. You need to be investing in the right shares. Buying and holding a stock that is falling and has little prospects of turning around won't be beneficial.

  The reason to buy and hold stocks is because nobody really knows how the stock market will perform. After all, predicting the future is incredibly difficult. As such, simply adding money regularly can be a more prudent strategy.

• Will ASX stocks overall rise in 2024?

  Experts are torn when it comes to whether or not the ASX will have a strong year. Some say they will outperform the American markets due to a high concentration of resource companies. Others point out that Australia might have a recession, which will hurt our sharemarket. Either way, nobody really knows for certain what the future holds.

• How to choose the best dividend stock

  If you're looking to buy dividend stocks you're usually looking at more mature businesses that have more predictable payouts.

  As such, you should be looking at companies with a strong track record of growth over a number of years as this can be an indicator of future dividend payouts.

  When it comes to buying dividend stocks you should also look for businesses that have strong cash flows, low debt and have a large share of their chosen field.

  If you are looking to track dividend you could also look into 3 metrics, being dividend yield, dividend payout ratio and dividend payout growth rate.

  1. Dividend yield – This ratio shows how much a company pays in dividend relative to its share price.
  2. Dividend payout ratio – This is the percentage a company's earnings is used to cover dividend payments.
  3. Dividend growth rate/dividend payout growth – These are 2 terms that describe the same thing. It is the average percentage rate of growth a stock's dividend has experienced over a time frame.

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