10 Best Investments to Watch in 2025: Opportunities Amid Market Volatility
By Kate Stalter | Edited by Aaron Davis | May 2, 2025
As investors assess their portfolios in a dynamic financial landscape, diversification remains a crucial strategy to mitigate risks. In the context of ongoing market fluctuations, certain investments are emerging as particularly noteworthy for 2025. Here’s a comprehensive look at the ten asset classes attracting attention for their potential to navigate volatility while offering opportunities for returns.
Key Takeaways
- Safe Havens: Gold and utility stocks are gaining traction among investors seeking security and consistent returns.
- Emerging Opportunities: Emerging markets and commodities are rallying as inflation persists and the dollar weakens.
- Higher Yields, Higher Risks: High-yield bonds and private credit offer attractive income but come with elevated risks.
The investment landscape has been characterized by significant volatility, especially recently, as stocks showed a notable rebound in late April, fueled by hopes of easing global trade tensions. Growth sectors, particularly technology and consumer discretionary stocks, played a pivotal role in this recovery, alongside traditional risk-sensitive assets like small-cap stocks.
1. Gold
Gold has historically served as a safe-haven asset, particularly during turbulent market conditions. Performance data shows the SPDR Gold Shares (GLD) ETF has gained over 20% year-to-date, significantly outpacing the S&P 500. According to Michael Wagner, co-founder of Omnia Family Wealth, gold’s recent uptrend began in 2023 amid geopolitical tensions. However, wary investors are reminded to approach gold cautiously due to its potential for rapid volatility.
2. Utilities Stocks
Typically perceived as a stable sector, utility stocks have gained momentum in 2025, with the Utilities Select Sector SPDR ETF (XLU) marking a return of 5% so far. Utilities can typically withstand economic fluctuations and pass on tariff-related costs to consumers, making them appealing for investors looking for steady income through dividends.
3. Thematic ETFs
Thematic exchange-traded funds (ETFs) aim to capitalize on specific investing trends. Despite their popularity, financial experts caution investors about their inherent risks. The ARK Innovation ETF (ARKK), which focuses on disruptive innovation, thrived in previous years but has faced significant outflows this year. Steven Rogé, CEO of R.W. Rogé & Co., emphasizes the importance of exercising caution with thematic investments due to their historical propensity to attract attention at market peaks.
4. Emerging-Market Equities
Emerging-market stocks have shown resilience during recent market corrections. ETFs such as the Vanguard FTSE Emerging Markets ETF (VWO) and the iShares MSCI Emerging Markets ETF (EEM) have posted gains this year. Analyst insights highlight robust performance in Chinese equities, with the iShares MSCI China ETF (MCHI) up over 10% year-to-date, driven primarily by the technology sector.
5. Private Credit
Private credit investments provide an avenue for higher yields, often favored when traditional banks offer less competitive terms. Notably, the SPDR SSGA IG Public & Private Credit ETF (PRIV) allows individual investors to access this asset class. However, caution is advised due to its association with higher risk, especially concerning leveraged companies as economic uncertainties prevail.
6. Private Equity
This asset class involves investing in privately held firms or taking public companies private with the objective of future sales or public offerings. The Invesco Global Listed Private Equity ETF (PSP) allows individual investors to participate, although experts warn about current elevated pricing, recommending a selective approach amid ongoing economic challenges.
7. Commodities
With inflation persisting, commodity investments have gained attention as a hedge against rising prices. Commodities can provide diversification and serve as a potential counterbalance to stock volatility.
8. High-Yield Bonds
As interest rates remain elevated, high-yield bonds may appeal to those seeking substantial income. They offer the potential for attractive returns, though analysts stress the need for careful selection due to default risks associated with lower-rated issuers.
9. Real Estate
Real estate investment has traditionally been a sound strategy for wealth building. Current market conditions may present attractive opportunities, particularly for income-generating rental properties or real estate investment trusts (REITs), if managed well amid economic fluctuations.
10. Cash and Cash Equivalents
In volatile markets, maintaining liquidity through cash and cash equivalents becomes a prudent strategy. Holding cash allows investors to capitalize on opportunities as they arise while providing a safety net during market downturns.
Conclusion
While the investment landscape for 2025 presents an array of opportunities, it is not devoid of risks. Investors are encouraged to conduct thorough research and consider market dynamics, liquidity needs, and personal risk tolerance when embarking on their investment journeys. As always, diversification remains a key strategy in navigating the uncertain terrain of the financial markets.