Investors looking to maximize returns without taking too much risk have several options next year, Wall Street experts say. According to the CNBC Market Strategist Survey released on December 13th, market strategists expect stock prices to rise in 2025, but expect it to be a tumultuous year. The S&P 500 index is expected to reach 6,630 by the end of 2025, according to the survey's average forecast. Meanwhile, bonds are entering the new year with rising yields. Mr. Schwab recently said he expects the bond market to also have a turbulent year, but believes there are opportunities for returns. So where are the best opportunities to invest $50,000 with some risk? CNBC Pro spoke to strategists and investment advisors to get their advice. Pick tech stocks, lock in bond yields Anthony Saglimbene, chief market strategist at Ameriprise Financial, likes this scenario with a 60/40 portfolio that takes a selective approach to stocks. Investors should focus on industry groups rather than sectors, he noted. For example, while tech stocks have fared well in 2024, he will bypass the larger information technology sector and focus on software companies that have not kept pace with artificial intelligence leaders. He also likes the company's financial position in 2025, which should benefit from strong earnings growth and potential regulatory relief from the Trump administration. This area will focus on companies related to capital markets. “As regulations go down, they become even stricter. [initial public offerings]”If there is more M&A, those investment banks will see their earnings accelerate more than insurance companies and other underperforming financial companies,” Sagrimbene said. He adds that corporate bonds “lock in, extend duration, and take advantage of some of the income opportunities that still exist in fixed income,” recommending investors who prefer a five- to seven-year term. Wanting to reduce your allocation, he said it makes sense to allocate 5% to 10% to alternative strategies and high-dividend stocks, rather than simply adding to stocks, adding: “If you want to take a little more risk in stocks, , I would be wise to do so.” method. “Be selective, diversify, and add in an equity income strategy. That way you can get exposure to stocks, but invest in a more volatile, less risky way and add some degree of “It will add an additional amount of revenue,” he said. James Humphreys, Founder and Managing Partner of Mindset Wealth Management, Equity ETFs, suggests building a portfolio of equity ETFs to get the best returns with moderate risk. There is. Of the ETFs mentioned, his largest investment was $20,000 in the Vanguard Growth ETF (VUG), which has an expense ratio of 0.04% and has returned about 37% year-to-date. “We're a domestic market company, but we're growth-oriented,” Humphries said, noting that the company has outperformed the S&P 500 over the past 10 years. In addition, Humphries added that he will invest $10,000 in the Invesco QQQ Trust ETF, which tracks the Nasdaq 100 index, giving investors access to the “Magnificent Seven” high-tech growth stocks. The expense ratio is 0.2%, up about 29% year-to-date. QQQ YTD Mountain Invesco QQQ Trust ETF Another $10,000 will be dedicated specifically to AI themes in the WisdomTree Artificial Intelligence Innovation Fund (WTAI). The expense ratio is 0.45%, up more than 10% so far this year. “This gives us access to the people who are making decisions based on what we see in the AI space,” Humphries said. As protection against expected tariffs from the incoming administration, Humphries plans to invest $5,000 in the Vanguard Small Cap Growth ETF (VBK). The fund's expense ratio is 0.07%, up about 18% year-to-date. “If you get into some kind of tariff war or trade war, the small-cap stocks, usually domestic stocks, could benefit,” Humphreys said. “Just leveling the trade playing field would be good for small-cap stocks in general.” His last $5,000 went directly into crypto, especially since the new administration appears to be crypto-friendly. will be invested in. Bitcoin is a popular choice, but those who want to speculate can also invest $1,000 of their allocation in Ethereum or other coins, he said. Mr. Humphries will invest directly in a cryptocurrency wallet. However, if new investors don't feel comfortable owning directly, they can access it through ETFs, he said. Looking to Dividend Growth Companies Mitchell Goldberg, president of ClientFirst Strategies, says another way to take some risk and earn high returns is to increase dividends, which have lagged the S&P 500 and Nasdaq overall this year. Invest in stocks, he said. The Vanguard Dividend Appreciation ETF (VIG) has returned a total of 17.2% year-to-date, compared to the S&P's return of 26.6% so far this year. VIG YTD Mountain Vanguard Dividend Growth ETF “Stocks that consistently raise their dividends each year often reflect earnings and cash flow growth,” Goldberg said. “When a company can increase its dividend, it's a sign of its health.” A company that pays out a large amount of dividends without growing could be a sign that its earnings and earnings are no longer growing. . It could also happen because stock prices have fallen significantly, he said. Sell Option For those with $50,000 to spend on something other than immediate cash flow needs or retirement investments, Chuck Failla, a certified financial planner and founder of Sovereign Financial Group, recommends the covered short option. I am proposing to sell a put. Option strategies involve writing out-of-the-money or at-the-money put options while simultaneously ensuring you have enough money to purchase the stock. He explained that sellers receive a put premium in exchange for agreeing to buy a specific ticker symbol at a specific price for a specific period of time. “The covered short put strategy is a way to reduce the risk-return profile of investments you want to make anyway,” Failla said. “A covered short strategy only makes sense if you are willing to own the underlying asset,” he says. For those with a moderate risk appetite and at least a five-year horizon, the SPDR S&P 500 ETF Trust (SPY ) is proposing a covered short put. Those who want to take on a little more risk may consider applying their strategy to the iShares Bitcoin Trust ETF (IBIT).
CHOOSE LANGUAGE
SELECT LANGUAGE BELOW
