Stocks in Translation guests suggest investors pay attention to these areas in 2025

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2024 it was a year of financial surprises for many investors. S&P 500 (GSPC) index saw significant growth and is poised to close the year with a 25% return.

Despite the high interest rates and rising unemploymentwas a good year for the US economy. But will this hold in 2025?

Economists and market strategists appeared in Yahoo Finance’s Shares in translation podcast recently to give their take on the stock market, and many offered insight on what investors should expect for the coming year.

Here are the key areas they suggested investors pay attention to.

With President-elect Donald Trump set to take office in January, certain aspects of his proposed policies could significantly impact market performance next year.

“I think the risk for the Fed going forward is that they go too far with rate cuts,” RSM chief economist Joe Brusuelas warned. “Given the changing policy matrix out of Washington, especially around tariffs and especially around forced deportations, we could risk spiraling wages and prices if we get a significant contraction in the labor supply.”

Brusuelas warned that some industries – notably construction, manufacturing, retail and leisure – could see restrictions next year with proposed deportation policieswhich risk higher inflation and long-term interest rates above 5%.

Read more: How Fed rate cuts affect your bank accounts, loans, credit cards and investments

Tech continues to dominate, with the Nasdaq Composite up more than 30% year to date. But investors may want to consider other areas of the market.

Ritholtz Wealth Management chief market strategist Callie Cox reminded investors to “think about balance” even as they call technology the “superstar of the market” in 2024.

“The market is not just technology – there are other sectors that are cheaper,” she said. “If you see that you have really good gains in some stocks, maybe consider taking some of those gains and pivoting into more unloved areas of the market.”

This ensures the portfolio remains balanced and prioritizes long-term growth, she said, preventing potential pitfalls if tech sees a downturn next year.

Christina Hooper, Chief Global Market Strategist, Invesco noted that stocks “expect economic acceleration next year.”

This could be good news for investments in small- and mid-cap companies, as she predicts that they could see significant growth in the coming year.

The story continues