BlackRock exec outlines ‘quality’ playbook for 2025 stock market

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Investors saw double-digit returns in major stock market indexes in 2024, a successful year with strong growth in many sectors.

But with a new administration beginning and the US bull market entering its third year, many investors are considering the best way to prepare their portfolios for 2025.

Garji Chowdhury, chief investment and portfolio strategist at BlackRock Americas, spoke with Brian Sozzi at Yahoo Finance’s inaugural auction about his outlook for the 2025 market and shared his thoughts on what will bring stocks under the incoming administration.

“Broadly speaking, what we’re talking about is the quality of the theme in our front view,” Choudhury said (watch the video above or listen below). Looking at reviews, it is the intersection of what we call quality and development.

Chowdhury recommends that investors pay attention to the way micro-narratives such as the interest rate environment and tariffs are changing the market.

Many economists and Federal Reserve officials see more “upside risks” to inflation from Trump’s trade and immigration policies, which could complicate the Fed’s path to reaching its 2% inflation target.

“I think it’s pretty clear that the federation is where it is right now,” Chowdhury said. But maybe you can cut one or two more times in March or June? I think based on the information so far. Now clearly, if inflation accelerates from this or growth continues to increase meaningfully from this pace, it will be difficult for the Fed to cut.

Chowdhury emphasized that active management or dynamic factor rotation funds could be strategies to consider to take advantage of policy changes.

“Obviously our dynamic factor rotation fund is focused on speed and focused on quality,” Choudhury explained, “but when micro-narratives or macro-narratives change, that can rotate on your behalf, and we think in 2025, that’s going to be very important.”

By sector, technology ( XLK ) and communication services ( XLC ) companies have been strong investment options over the past two years, and Chaudhuri said the trend is likely to continue through 2025.

“These are cash-flow-rich companies, and they’re not leveraged like some parts of the market,” Chowdhury said of big names like Nvidia ( NVDA ) and other “Magnificent Seven” tech stocks. .

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She also expects Financials (XLF) to do well.

“If you look at revenue growth expectations, not just for Q4 but Q1, that’s where we expect to see some strong revenue growth in financials followed by tech and com. services,” Chaudhuri said. This could be an area where investors continue to see returns as they did in 2024.

She noted that there is a place for bitcoin in portfolios as the conversation around the cryptocurrency continues to evolve. Both are valuable assets to own in moderation, she says, likening cryptocurrency to gold.

“We’re going to talk a little bit about adding gold and bitcoin — again, about scaling appropriately,” she said. “When you’re looking at a very volatile asset class, size is very important. So if you’re concerned about increasing defaults, could this be an appropriate hedge?”

As many investment experts try to predict where the stock market will be headed in 2025, the BlackRock executive admits that even the most prepared must be ready to adjust to the market’s various changes.

“I think one of the things that 2024 taught me — at least with an open mind — is that we have to be very quick when the information changes and we have to adapt ourselves to the changing narrative,” she said.

Three times a week, Yahoo Finance executive Brian Sozzi He holds insightful conversations with the biggest names in the field and in business and marketing Tender opening. You can find more parts on us. Video center Or look at you Preferred streaming service.

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