- Some experts suggest diversifying investments across stocks, bonds, and real assets for 2025.
- Others suggest leaning into the AI trade or buying your first rental property.
- Investing can be tricky. Need ideas? We’ve got you covered.
Do you have $10,000 burning a hole in your pocket? If you’re looking to invest it, you’ve come to the right place.
Investing can be tricky. How much should you allocate to stocks and bonds? What if you need the money in five years? When should you come into the market if stocks are in the middle of a volatile period, like they seem to have entered on Monday?
Ultimately, everyone has different goals and needs with their money, and deciding where to put it calls for individualized plans that account for timelines and how much potential losses one can stomach.
If you’re looking for ideas, we’ve got you covered. In recent weeks, we asked six experts where investors sitting on a chunk of money should consider putting their cash for the months and years ahead. Answers, which came before Monday’s stock market sell-off, varied across asset classes and timelines and are listed below.
James Ragan, director of wealth management research at D.A. Davidson
Stock market valuations are high, leading some of Wall Street’s biggest names to worry that the S&P 500 is a bubble ready to pop. While Ragan recognizes valuations are elevated, he still sees opportunities for investors to put cash to work.
“We’re still pretty comfortable adding funds to the market,” Ragan told BI. “We still like the S&P 500 and large-cap US equities.”
Among large-cap companies, technology stocks have pushed the market higher, which is why Ragan believes it’s important to maintain a dedicated allocation to tech.
“On one hand, we’re saying don’t get too overweight there, but I think you still want to have exposure in that sector,” Ragan said of tech.
However, it’s important to have diversified sector exposure, and Ragan sees opportunities in communication services, healthcare, and financials. Companies in these sectors tend to have low price-to-earnings-growth ratios, meaning they’re undervalued relative to their earnings growth rate. These sectors will also benefit from increased deregulation under President Donald Trump, Ragan said. Dividend stocks are also trading at attractive valuations, he added. These stocks can benefit a portfolio by providing a steady income stream.
With rising yields, Ragan also sees opportunities in fixed income, particularly in short-term bonds. Don’t just stick with Treasurys, though. Ragan recommends adding corporate and municipal bonds to the mix.
Examples of funds that offer exposure to these areas of the market include the SPDR Portfolio S&P 500 High Dividend ETF (SPYD) and the Invesco KBW Bank ETF (KBWY).
Lance Dobler, vice president and senior regional director at TIAA
On the heels of two stellar years for the stock market, Dobler said he’s inclined to be a bit more defensive and cautious in the year ahead — especially if an investor is looking at a short-term time horizon. Price-multiple expansion won’t come as easy, and investors are going to be looking for real earnings results, he said.
Broadly speaking, that boils down to taking a three-part approach: allocating to fixed-income amid robust yields, so-called real assets as inflation stays elevated, and defensive parts of the stock market amid stretched valuations.
Within the fixed-income category, Dobler likes investment-grade credit, Treasury inflation-protected securities, and municipal bonds. US money-market funds and high-yield savings accounts are also attractive options, he said.
As for real assets, he said real estate, commodities, and infrastructure plays would get a boost as inflation remains sticky.
And for defensive stocks, he said quality companies — those with stable and consistent earnings track records — would benefit if growth stocks start to hit trouble like they did in 2022.
“The economy is slowing, financial conditions are tightening, and so it’ll reward more of a defensive- and quality-focused strategy,” Dobler said.
Some examples of exchange-traded funds offering exposure to Dobler’s ideas include the GMO US Quality ETF (QLTY), the VanEck Real Assets ETF (RAAX), and the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD).
Gary Quinzel, vice president of portfolio consulting at Wealth Enhancement
Quinzel believes that US exceptionalism will drive the stock market in 2025. Stocks have posted strong earnings, the US GDP is slated to grow at 2% to 3% this year, and secular tailwinds such as AI will provide a significant boost to the economy, he said.
If you’re looking to grow $10,000, “you certainly want to have diversified equities, and you certainly want to be focused on the US,” Quinzel told BI.
In this environment, investors shouldn’t feel constrained by the 60/40 stock-to-bond portfolio, especially if you have a long time horizon, Quinzel said. It’s perfectly OK to take advantage of the robust economy and allocate 80%, or even all, of your portfolio to equities, he said.
For those who want to add more stability to their portfolios through fixed income, Quinzel recommends steering clear of high-yield bonds and going for Treasurys, corporate credit, and asset-backed securities.
Quinzel also echoed Ragan’s suggestion that investors branch out from the Magnificent Seven. He sees plenty of opportunities to play the Trump trade, such as financials and industrials. Both of these sectors will benefit from deregulation, M&A activity, onshoring, and defense spending, which Quinzel anticipates will increase under the new administration.
Quinzel is also a fan of momentum and quality investing.
“One great way to start investing is by simply utilizing funds that have those traits of momentum and quality because both of those can do really well in this kind of late cycle mode that we’re in,” he said.
Funds that provide exposure to these market areas include the iShares MSCI USA Momentum Factor ETF (MTUM) and the Invesco S&P 500 Quality ETF (SPHQ).
Brian Rudderow, CEO of HBR Colorado
For those up for a more hands-on project, buying a multifamily property could be a good option, said Brian Rudderow, a real-estate investor and the CEO of HBR Colorado.
While that may sound like it’s outside the realm of possibility with just $10,000, Rudderow pointed to a Fannie Mae program launched in late 2023 that allows mom-and-pop investors to buy multifamily properties with just a 5% down payment. That’s $10,000 for a $200,000 property.
That’s still relatively cheap for a multifamily property, let alone for a single-family home, in many areas around the US. But they do exist.
“If you can find a lower-income city or a cheaper side of town, then you can do it with $10,000,” Rudderow said.
The monthly mortgage payment on a property at this price point would be around $2,500, Rudderow said. So, if you charged around $1,500 per unit, you could generate a positive cash flow of $500 a month.
Daniel Milan, managing partner and investment advisor at Cornerstone Financial Services
The stock market performed strongly in 2024, and Milan believes investors should be optimistic about its continued growth.
There are plenty of opportunities for investors to put their cash to work. Industrials, financials, and energy are popular sectors for investors looking to take advantage of the Trump trade, Milan said. He also sees individual opportunities within those broad sectors. Investors should keep an eye on energy in particular.
“For the first time in a number of years, there’s a significant amount of value and strength in the energy sector,” Milan said. If Trump’s first term is any indicator of what’s to come, Milan is bullish that the president’s policies will be extremely beneficial for energy companies.
Milan is less focused on big oil companies and more interested in natural gas. “Natural gas pipelines are showing extraordinary strength from a momentum standpoint right now,” he said.
His top picks include Enterprise Product Partners (EPD) and Energy Transfer (ET).
Within financials, Milan is bullish on large private equity firms such as Blackstone (BX), Apollo Global Management (APO), and KKR & Co (KKR).
“I think we’re at the beginning stages of the next evolution within those types of firms, especially with regards to private credit,” Milan said. These firms have poured a significant amount of resources into the private credit business, and Milan believes the asset class will take off in the coming years.
Lance Roberts, chief investment strategist at RIA Advisors
Looking into the next 12 months, Roberts said he’s increasingly leaning into the AI trade with the $2 billion portfolio he manages as infrastructure investment continues to grow.
“It’s coming, and it’s coming fast,” Roberts said.
Part of that trade means investing in software and chips companies, like Twilio (TWLO), Palantir (PLTR), Nvidia (NVDA), and AMD (AMD), he said.
Another piece of that play is in the energy companies that will provide the power to run data centers, he said. Some of his holdings include American Electric Power (AEP), Duke Energy (DUK), Kinder Morgan (KMI), and GE Vernova (GEV).
But Roberts isn’t blanketly bullish on AI-related stocks. Investors will start to put more of an emphasis on fundamentals, he said, and parts of the growth factor may start to get washed out in the year ahead. This may come amid a move into safer, dividend-providing stocks like Procter & Gamble (PG), he said.
“I think the unobvious trade is a rotation potentially from high-beta growth,” Roberts said. “Dividend value has been really ignored over the last couple of years, and it’s very out of favor.”
