As 2024 comes to a close, here’s some dumb wisdom from our entire free website team that they’ve learned from another year of investing in the stock market.

Patient investors can find opportunities to purchase almost any stock at bargain prices

by Stephen Wright. Even the most attractive stocks become inexpensive at some point. In 2024, I could see some stocks trading at multiples that I once thought were unimaginable.

Two examples come to mind. WITH FTSE100 Is Diageoand discount retailer Five below this is an American example.

Diageo shares trade at a price-to-earnings (P/E) multiple of around 23. However, this year the company’s shares have fallen to 16 times earnings – the lowest level in a decade.

Similarly, Five Below stock has traded at an earnings multiple this year of 12. On a P/E basis, the stock has never been cheaper – the ratio has typically been in the 30-40 range.

The lesson is that patient investors can find opportunities to buy almost any stock at bargain prices. That being said, there’s really no reason to buy the stock at a price that isn’t truly justified.

Stephen Wright owns shares in Diageo and Five Below.

Be careful not to hold on for too long

Author: Zaven Boyrazian. 2024 was a great year for the stock market. It was invigorating to see my portfolio outperform and deliver double-digit returns. But not all my investments lived up to expectations. AND Frontier development (LSE:FDEV) is a great reminder of the risks of holding on to losing stocks for too long.

The game development studio seemed perfectly positioned to thrive in 2020. Its games were flying off the shelves and the studio had an impressive lineup of modern titles under its own IP and license, including Warhammer AND Formula 1.

Despite previous successes, neither release impressed gamers. Sales dropped and profits fell. And each time I persisted, assuming that the next release would facilitate turn things around.

I played and enjoyed Frontier games when I was younger and unconsciously ingrained the mindset. I ended up holding the stock through four flops, which caused the stock price to drop 90%. Lesson: Don’t invest in companies that consistently disappoint customers.

Zaven Boyrazian has no shares in Frontier Developments.

Dividends will keep me alive

By Harvey Jones. Home builder Taylor Wimpey (LSE:TW.) had a great 2024, but its shares suddenly fell 19.51% in the last three months, wiping out most of my recent gain. They increased by only 6.52% in 12 months.

Hopes for a series of interest rate cuts appear to have been dashed amid persistent inflation that will squeeze mortgage costs and buyer demand.

I’m not worried. Taylor Wimpey has a powerful balance sheet and its order book currently stands at £2.2 billion plus joint ventures. There’s no way I’m selling.

And the lesson learned? High-yielding dividend stocks provide comfort in complex times. Taylor Wimpey has a surprising yield of 7.33% and paid me £164.40 on November 15, which I will immediately reinvest.

This will buy another 126 shares at today’s reduced price of 1.30p, bringing my total to 3,551. One day my Taylor Wimpey shares will rebound and thanks to the dividends I will have even more.

Harvey Jones owns shares in Taylor Wimpey.

Momentum is a powerful beast

by Paul Summers. My main lesson was that exorbitant stocks can appreciate well above what I consider fair value.

The best example of this is certainly the Magnificent Seven tech giants from overseas. Even though they already boast really high valuations, stocks such as: Nvidia they continue to grow as investors go crazy over the potential of artificial intelligence to radically change our lives (and make some earnest money in the process).

This does not mean that in 2025 I plan to completely stop looking at the company’s fundamentals. Ultimately, the long-term returns of any stock will be based on its earnings and assets. As Warren Buffett said: “In the tiny run the market is a voting machine, but in the long run it is a weighing machineme.’

But I will also be careful not to steal profits unless the story changes dramatically.

Paul Summers has no position at Nvidia