In 2023, I regretfully held some cash on the sidelines. The appetising 'risk-free' return on savings was a big reason why. However, my real returns on this cash pile came to an approximate 1% loss after inflation. Instead, I'm putting that lazy capital to work in 2024 by investing it where it may ward off wealth-eating inflation.
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Where to invest $7,000 sitting in cash
There are plenty of deterrents to deploying my money into the share market right now — there always are. Most notably, there are the ever-present warnings from investment analysts, cautioning that now may not be the right time to buy.
I have no doubt the same views were being plastered across the headlines last year as well… and the year before that. Little was often said about the threat of losing 13% purchasing power between 2021 and today by holding cash, though.
On that note, here are three ASX stocks I plan to grow my money with this year.
ASX stock #1: Boring compounder
Propel Funeral Partners Ltd (ASX: PFP) is already my second-largest holding. Yet, if the Australian and New Zealand funeral operator delivers another result showing consistent business growth, I'll be scooping up another $3,000 worth of shares.
In FY23, the company achieved revenue growth of 16% and a profit increase of 18.5%. Propel plans to release its first-half results for FY24 on 21 February. I expect growth to be somewhat weaker than the prior year due to smaller acquisitions. However, I'm pleased with management's diligence approach to outlaying capital.
As outlined in my in-depth review, I'm confident Propel can consolidate the industry and reap the rewards over the long term.
ASX stock #2: Glamorous growth machine
How many ASX-listed retailers do you know that have tripled their revenue in six years? Harder still is maintaining profitability throughout the rapid growth. Lovisa Holdings Ltd (ASX: LOV) is a cheap jewellery retailer showing others how it can be done.
The opportunity here is in Lovisa continuing its successful expansion into regions outside Australia. While reaching maturity locally, the United States, Europe, and Asia offer ample runway to grow. For example, total sales in the US increased 78.1% in FY23.
Furthermore, Lovisa stated it was preparing to open its first stores in Vietnam and mainland China in November/December 2023.
This is where I intend to invest $2,000 in 2024. The only reason why I'm refraining from more is the balance sheet. Lovisa had an 81% debt-to-equity ratio in July 2023, which would usually nudge me to steer clear.
ASX stock #3: Energy squeeze
Lastly, I believe there is an upside to be captured in the energy sector over the next few years. Between conflicts erupting in energy-rich lands and climate targets still out of reach, I expect prices to rise much higher to incentivise increased supply.
I'm of the belief that more regions will turn to nuclear energy as a means of improving energy security and reducing emissions. While the price of uranium has nearly doubled in the space of a year, recent reports of impacted production could support further strength.
Admittedly, miners are not my specialty. As such, I plan to invest $2,000 into an exchange-traded fund (ETF) for some exposure. The one on my radar is the Betashares Global Uranium ETF (ASX: URNM), charging a 0.69% management fee.
