The top investing lessons from 2024

Here are the biggest investing lessons that myself and my colleagues on Morningstar’s editorial team took from 2024.

Shani Jayamanne

Debt of any kind makes me nervous. So in 2024, I found myself tempted to divert my regular investment contributions towards paying down my mortgage.

With an interest rate at 5.89%, the guaranteed ‘return’ from reducing debt seemed appealing—especially compared to the uncertainty of the markets. As I contemplated the decision, however, I revisited the foundation of my Investment Policy Statement:

Disciplined, regular investing for the long term.

Historically, equity markets have delivered average annual returns significantly higher than mortgage rates.

While this kind of performance may be an anomaly, it highlighted the opportunity cost of stepping away from my investment strategy. 

Paying down my mortgage would have felt secure, but it wouldn’t have allowed me to participate in the compounding growth that equity markets offer over time. Sticking to my plan, despite the temptation to prioritise debt pay-down, reinforced the importance of focusing on long-term growth rather than short-term guarantees. 

Ultimately, the lesson was clear: reducing debt is important but diverting from a solid investment strategy can lead to significant missed opportunities. Not just for returns, but for the consistency and discipline that underpin financial success. 

Simonelle Mody

I joined Morningstar in September after my dream graduate job didn’t turn out to be such a dream after all.

Getting to grips with this role has made me think more deeply about investing, which is something I’ve always been interested in but not especially successful at.

Like many others, my investing history contains a handful of gains and a boatload of losses – often from speculative bets and attempting to time the market or moves in a particular share.

The phrase “time in the market beats timing the market” clearly had no influence on my prior investing decisions. Yet realising the true meaning of this principle has been the biggest investing lesson I learnt in 2024.

The data is clear: holding for the long term will consistently earn better returns than changing your position erratically.

Gone are the days of checking my portfolio every 10 minutes and scanning the news to see what would affect my holdings. I now champion a set-and-forget strategy which gives me peace of mind and confidence that any short-term volatility will be smoothed out in the long term.

Mark LaMonica

On an aggregate basis 2024 was a strong year for markets. With hindsight we will look back on these returns and surmise this was a great year for the economy and markets. And it was.

Investors who followed markets and the headlines on a day-to-day basis may have a different view. We continue to face inflation and a cost-of-living crisis. The much-predicted interest rate cuts never materilised. There is angst about the cost of housing. We are inundated with worries about the global economy and constant coverage of trade-wars and tariffs.

There was a short-lived but significant drop in markets in early August that saw extremist headlines declaring the start of a new bear market. Several weeks later the losses were gone after a market rally.

What is my lesson from 2024? Things always seem dire. There are always going to be scary headlines. There are always risks. Most don’t eventuate. Those that do we work our way through. And with some perspective the things we get worked up about fade into insignificance.

What is hard about investing is staying the course through all this noise. Markets reward patience. Your goals are accomplished through consistency. Aesop told us about the race between the tortoise and the hare. The hare made fun of the tortoise for being slow and when the time came to race the hare jumped ahead of the tortoise. But the tortoise ‘kept plodding on, and in time reached the goal’.

Find whatever investment approach allows you to keep plodding along. 

Joseph Taylor

The biggest lesson I learned in 2024 was the power of doing nothing.

Compounding has often been referred to as the eighth wonder of the world. Unfortunately, a lot investors get in the way of it by constantly shuffling their portfolios around. I am speaking from personal experience here.

In 2021, for example, I spent the equivalent of $1830 on trading commissions in a year where I only contributed $7500 in fresh cash, and my portfolio as a whole was only worth around $15k. This huge drag from fees made it virtually impossible for the value of my portfolio to go anywhere, even in a banner year for equity market returns.

I have spent a lot of 2024 reflecting on past mistakes like this. This has often made me feel and look like an idiot. But it has also given me clarity on how to avoid repeating these mistakes.

I am confident that 2024 was my best year of investing yet. This was not down to any prowess on my behalf – most major equity markets did well, and a rising tide lifts many boats. It was mostly because I have cut my costs and held my investments long enough for them to pay off.

I’ve found that the best way for me to avoid overtrading to only make investments that 1) fit my strategy and criteria perfectly and 2) are in companies that, in theory, I would happily own forever. I have found that I am less likely to emotionally trade these shares.

Joseph Taylor is an Associate Investment Specialist, Morningstar Australia.

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