Investing.com – Many analysts are wondering about the possibility of another year of strong stock market gains, while 2023 and 2024 have already seen gains of more than 20% on the S&P 500.
However, according to Goldman Sachs (NYSE:), stocks seem increasingly ready to undergo a correction at the start of the new stock market year.
Peter Oppenheimer, Goldman Sachs’ chief global equity strategist, said there could be a near-term digestion period for stocks before further gains can be made. He noted that the two-year performance, from 2023 to 2024, is in the 93rd percentile of the last 100 years, underscoring the extent of the market’s upside.
The powerful rebound in stock prices in recent months leaves stocks “priced to perfection,” said Oppenheimer, who warned that “although we expect stock markets to rise further across the board, year – largely thanks to earnings – they are increasingly vulnerable to a correction due to further rises in bond yields and/or disappointments in economic data or earnings growth. »
According to Oppenheimer, stocks benefit from a favorable backdrop overall, given that the Federal Reserve is in an interest rate reduction cycle without the economy being in a recession. On the other hand, he worries about high valuations and unusually high market concentration.
He concluded that, “while we remain generally positive on stocks, the risks of disappointment in the short term increase.”
In this context, he recommends focusing on diversification in order to dilute risk.
Thus, the question arises of how to identify stocks that are good opportunities for building a diversified portfolio.
How to spot the most explosive opportunities?
To identify these stocks, investors can use several methods, such as using a screener to search for stocks matching specific criteria, as we did earlier in this article, or relying on forecasts analysts and focus on the stocks for which their opinion is the most bullish.
However, Artificial Intelligence also offers interesting solutions. InvestingPro’s ProPicks AI is a good example, with many thematic portfolios across many markets run by a fusion of AI and human expertise. Each month, InvestingPro subscribers receive a list of stocks to buy and sell for each strategy, which serves as a reservoir of trading ideas for the month.
And the best part is that since last week ProPicks IA has included two specialized strategies on French stocks!
It’s about “Top French Stocks“, whose objective is to outperform the , and to “Value Opportunities in France“, which seeks to identify the best value opportunities on the Paris Stock Exchange.
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+278.5% gains since January 2015 for the “Value Opportunities in France” strategy (only for Pro+ subscriptions)
Note that InvestingPro subscribers also benefit from over 30 other strategies across all global markets, in addition to all the other analysis and research tools available on the platform.
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