10 Best Investments to Watch in 2025
As volatility persists in the market, financial experts highlight ten investment classes that could offer potential returns while requiring careful consideration.
By Kate Stalter | Edited by Aaron Davis | May 2, 2025
The investment landscape in 2025 is marked by volatility, yet there remain strategic opportunities for investors willing to navigate the risks. With ongoing fluctuations resulting from global economic conditions, various asset classes stand out as worthy of attention. Here’s a closer look at the ten investments gaining traction this year.
Key Investment Insights
1. Gold
Gold has traditionally served as a safe haven during turbulent times, and recent trends support this role. The SPDR Gold Shares ETF (GLD) has seen a remarkable rise of over 20% year-to-date, significantly outpacing the S&P 500. According to Michael Wagner, co-founder of Omnia Family Wealth, the uptrend in gold reflects rising tensions in global affairs that elevate its safe-haven appeal. However, he cautions investors against over-committing to gold due to its inherent volatility.
2. Utilities Stocks
Generally regarded as a stable sector, utility stocks have performed well in 2025, with the Utilities Select Sector SPDR ETF (XLU) yielding positive returns. These stocks typically offer reliable dividends, making them an appealing option for investors seeking stability amid uncertain market conditions. Furthermore, advancements in energy technologies, particularly those supporting artificial intelligence, are contributing to renewed interest in the utilities sector.
3. Thematic ETFs
Thematic exchange-traded funds (ETFs) focus on specific trends or industries, often attempting to capitalize on emerging themes. The ARK Innovation ETF (ARKK), known for its focus on disruptive technologies, enjoyed significant success in prior years but has experienced outflows recently. Experts advise caution, noting that thematic ETFs can be expensive and risky, often attracting investors during market peaks before downturns set in.
4. Emerging-Market Equities
With U.S. stocks facing corrections, emerging-market ETFs, including the Vanguard FTSE Emerging Markets ETF (VWO) and the iShares MSCI Emerging Markets ETF (EEM), are witnessing impressive gains. Factors contributing to this upward momentum include strength observed in Chinese equities and overall fluctuations in the dollar. Portfolio manager Ola El-Shawarby highlights the technology sector’s crucial role in boosting emerging markets’ performance.
5. Private Credit
As an alternative fixed-income investment, private credit is becoming more accessible for individual investors. With the potential for higher yields, this asset class is garnering interest, though it comes with substantial risk. Experts recommend cautious engagement, advising investors to assess the health of underlying companies, especially those with higher leverage, as economic conditions evolve.
6. Private Equity
Private equity investment involves acquiring ownership stakes in companies not publicly traded. While historically limited to larger institutional investors, recent developments allow individuals access through ETFs like the Invesco Global Listed Private Equity ETF (PSP). Joshua Mangoubi of Considerate Capital notes a recovery in this sector; however, he emphasizes the need for selective investment due to elevated company valuations amid economic uncertainties.
7. Commodities
The persistence of inflation has drawn significant interest to commodities as a hedge against rising prices. Commodities like oil, gas, and agricultural products are being closely watched as investors consider how fluctuating inflation levels might impact their portfolios.
8. High-Yield Bonds
High-yield bonds offer the promise of higher income, but they also come with increased risks. As economic conditions fluctuate, careful analysis is vital for determining which bonds may provide good returns without excessive exposure to default risk.
9. Real Estate
Real estate remains a perennial favorite for many investors, often viewed as a safe long-term commitment. Economic conditions, including interest rates and housing demand, play crucial roles in determining the sector’s performance in the coming years.
10. Cash and Cash Equivalents
Lastly, keeping a portion of investments in cash or cash equivalents provides liquidity and safety, allowing investors the flexibility to reposition their portfolios rapidly in response to market changes.
In conclusion, while these ten investment classes exhibit potential this year, the common theme among financial experts is caution. A diverse strategy that accounts for risk and market volatility remains paramount for any investor navigating the complexities of 2025’s financial landscape. As always, individual investment decisions should align with broader portfolio goals and risk tolerance.
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