10 Best Investments to Watch in 2025
By Kate Stalter
Edited by Aaron Davis
May 2, 2025
As we move further into 2025, investors are navigating a complex and ever-evolving financial landscape. The year has already shown signs of volatility, with various asset classes oscillating significantly. While opportunities abound, a prudent approach that emphasizes diversification and caution remains essential. Here are ten investments worth watching closely, each attracting attention for different reasons amid the current market conditions.
Key Highlights of 2025 Investments:
- Gold
- Utilities Stocks
- Thematic ETFs
- Emerging-Market Equities
- Private Credit
- Private Equity
- Commodities
- High-Yield Bonds
- Real Estate
- Cash and Cash Equivalents
The Resilience of Gold
In times of market turbulence, gold has historically served as a safety net for investors. In 2025, this trend continues as the SPDR Gold Shares (GLD) ETF surged over 20% year-to-date, significantly outperforming the S&P 500. Michael Wagner, co-founder of Omnia Family Wealth, notes that the latest uptrend in gold was initiated by escalating tensions in the Middle East, reinforcing gold’s role as a safe-haven asset. However, Wagner warns that while gold can stabilize a stock portfolio, it can also see sharp declines if investor sentiment shifts rapidly. Caution in over-investing is prudent.
Steady Returns from Utilities Stocks
Typically viewed as stable, utilities stocks are experiencing a resurgence in 2025. The Utilities Select Sector SPDR ETF (XLU) has returned approximately 5% year-to-date. Investors are gravitating towards utilities due to their reliability and consistent dividend payments amidst market turbulence. Moreover, an optimistic outlook regarding the energy demands from artificial intelligence applications has bolstered growth in this sector.
Thematic ETFs: A Risky Bet
Thematic ETFs, such as the ARK Innovation ETF (ARKK), have captured investor interest in recent years. These funds revolve around innovative industries but can be risky as market cycles fluctuate. Steven Rogé, chief investment officer and CEO of R.W. Rogé & Co., advises caution, noting that investors should be wary of thematic ETFs due to their tendency to attract a crowd just before potential downturns.
Emerging-Market Equities Gaining Traction
Emerging-market equities are gaining popularity as alternative investments, particularly due to recent corrections in U.S. stocks. ETFs like the Vanguard FTSE Emerging Markets ETF (VWO) have seen positive returns year-to-date. Analysts highlight that strength in Chinese equities, indicated by the iShares MSCI China ETF (MCHI), is a significant driver for this trend. Ola El-Shawarby from VanEck cites the technology sector as a pivotal contributor to the performance of emerging markets.
Exploring Private Credit
Private credit offers an alternative fixed-income opportunity for investors searching for higher yields. With more accessibility for individual investors via ETFs like the SPDR SSGA IG Public & Private Credit ETF (PRIV), it represents a growing frontier in finance. Nonetheless, as Rogé points out, although private credit can yield higher returns, it carries elevated risks, and investors should assess their exposure carefully, particularly in light of potential economic slowdowns.
A Glimpse into Private Equity
Private equity, which provides ownership in non-publicly traded companies, is starting to see recovery, but it is no longer the robust opportunity it once was. ETFs such as the Invesco Global Listed Private Equity ETF (PSP) are making these investments accessible to a broader audience. Joshua Mangoubi, chief investment officer at Considerate Capital, notes that with higher interest rates, success lies in selecting managers capable of creating genuine value.
Commodities as an Inflation Hedge
With inflation remaining a concern in 2025, commodities are anticipated to remain in demand, providing a hedge for investors. Different asset classes within commodities may experience increased interest as prices fluctuate based on economic conditions.
Evaluating High-Yield Bonds and Real Estate
High-yield bonds offer attractive income potential but come with their own risks, particularly during periods of economic uncertainty. Additionally, real estate continues to be a focal point for many investors seeking both stability and potential appreciation, although caution is advised due to the shifting economic backdrop.
Cash and Cash Equivalents
In a volatile environment, maintaining liquidity through cash and cash equivalents becomes increasingly important. This strategy assists in navigating uncertainty while providing opportunities for reinvestment when market conditions improve.
Conclusion
As 2025 progresses, investors are urged to remain vigilant and methodical in their investment strategies. Each of these ten asset classes offers unique potential, but they also come with varying degrees of risk. By focusing on diversification and careful analysis, investors can better position themselves to capitalize on opportunities while managing the inherent risks associated with the current market climate.