Investing Insights: 10 Best Investments to Watch in 2025

By Kate Stalter
Edited by Aaron Davis
Published: May 2, 2025

As the investment landscape evolves, 2025 promises to present a range of opportunities and risks for investors. With volatility at the forefront, it’s crucial for investors to consider diversification to safeguard their portfolios. U.S. News highlights ten asset classes that are gaining traction during this unpredictable period, each with its own unique characteristics and potential for returns.

Key Investment Takeaways

1. Gold: As a traditional safe haven, gold continues to appeal to investors amid market turbulence.
2. Utilities Stocks: Reliable and resilient, utilities are becoming favored for their stability and dividend potential.
3. Thematic ETFs: Innovative themes present exciting opportunities, although they come with higher risks.
4. Emerging-Market Equities: These markets are showing promise, buoyed by stronger demand and shifts in global economic policy.
5. Private Credit: Higher yielding but riskier, private credit is attracting attention as an alternative investment.
6. Private Equity: Involvement in privately held companies is growing, albeit with a need for cautious selection.
7. Commodities: Given ongoing inflationary pressures, commodities are back on the radar for many investors.
8. High-Yield Bonds: These bonds offer elevated income potential, albeit with increased risk factors.
9. Real Estate: The fixation on real estate remains as many seek stable, long-term investments.
10. Cash and Cash Equivalents: With uncertainty pervading markets, liquidity is vital for investor flexibility.

The Resurgence of Gold

Investors have often turned to gold during times of market instability, and the trend is resurfacing in 2025. The SPDR Gold Shares (GLD) ETF boasts a year-to-date performance increase of over 20%, significantly outpacing the S&P 500 Index. Michael Wagner, co-founder of Omnia Family Wealth, highlights that while gold’s price can rise significantly during uncertain times, it is essential for investors to avoid overexposure, as rapid declines can follow swift increases.

Utility Stocks: A Safe Bet

Utility stocks have emerged as unexpected leaders within the S&P 500, as evidenced by the Utilities Select Sector SPDR ETF (XLU) gaining 5% year-to-date. Utilities are often insulated from economic downturns due to regulated pricing structures and reliable dividends. This sector is particularly attractive during volatile periods, providing a stable income stream for investors.

Thematic ETFs: Caution Required

Thematic ETFs, which target innovative investment trends, continue to attract attention, such as the widely recognized ARK Innovation ETF (ARKK). However, caution is advised; Steven Rogé from R.W. Rogé & Co. points out that thematic ETFs can often suffer from poor timing and become highly costly compared to broader market index funds.

Strong Performance in Emerging Markets

Emerging-market equities, including funds like the Vanguard FTSE Emerging Markets ETF (VWO) and the iShares MSCI Emerging Markets ETF (EEM), have demonstrated resilience amidst U.S. market corrections. Analysts note that favorable performance in sectors such as technology, particularly in China, has bolstered emerging market growth.

Investors Eye Private Credit

As businesses increasingly seek loans outside of traditional banking channels, private credit is gaining traction. Offering potentially higher yields, this alternative fixed-income investment carries inherent risks. The recent launch of the SPDR SSGA IG Public & Private Credit ETF (PRIV) allows individual investors access to this asset class, although experts stress the importance of exercising prudence in this space.

Private Equity on the Rise

Private equity, which involves investments in companies not publicly traded, is seeing renewed interest. While opportunities exist, they are often accompanied by elevated pricing and varying market conditions. Joshua Mangoubi of Considerate Capital advises investors to carefully select managers who can create value rather than simply leveraging existing assets.

Commodities Remain in Focus

Given persisting inflationary trends, commodities are receiving renewed attention. As inflation impacts purchasing power and economic stability, many investors are considering commodities as part of a balanced strategy.

Final Thoughts

While opportunities abound in 2025, the underlying theme remains one of caution. Investors should be discerning, focusing on asset classes appropriate for their risk appetite and long-term goals. With an eye on both growth potential and market stability, those navigating these waters will need to balance their portfolios thoughtfully.

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