What Are the Investment Opportunities and Threats in 2025?
It's the Year of the Wood Snake, representing growth, introspection, transformation and a need for patience. What could that mean for your finances?


Every 60 years, the Chinese lunar calendar combines the two symbols of wood (fostering growth) and the snake (representing wisdom and the ability to shed its skin for progress). The wood snake is a powerful combination that encourages introspection and gradual growth, according to Architectural Digest India. What does this have to do with your finances?
As we look ahead to 2025, I anticipate growth but, much like the wood snake, at a moderate pace. Forecasts for GDP growth in 2025 vary. The St. Louis Fed survey shows a consensus average of 2.1% real GDP growth in 2025. Growth, yes, but a little off from the growth rate of 2.8% in the third quarter of 2024. The fourth-quarter rate is expected by the end of January.
The economy is not the stock market. The stock market is forward-looking, anticipating growth or no growth. Possible inflection points in 2025 could come via two ways — President Donald Trump’s policies and the Federal Reserve. Will Trump give us what the stock market likes — deregulation, tax cuts, a Ukraine peace deal or not so much — policy volatility, tariffs, labor market restrictions? Or will the Federal Reserve continue to lower interest rates, or maybe — hate to say it, but it’s possible — raise rates again?

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Given the uncertainty and the fact that we are coming off of the S&P 500’s first back-to-back 20%+ annual returns since the late 1990s, stock investors could see volatility in 2025. But what does that mean for your portfolio? What should you do? Like the wood snake, now is a good time for introspection.
Step No. 1: Review your equity exposure
After two years of double-digit growth in the S&P 500 index, is your stock allocation still appropriate? Are you tilted more to equities than you should be? Reviewing your asset allocation — the mix of stocks, bonds, real estate and other investments — is important to do now, before it might be too late.
Step No. 2: Review your equity style
Many investors have narrowed their equity exposure to a few large companies. They are chasing returns in the handful of stocks that did really well in 2024. They may have little exposure to smaller companies or international stocks. That could be a problem in 2025 if other parts of the market rally. Ensure your portfolio is balanced and not overly exposed to one style of investing.
Step No. 3: Diversify beyond stocks and bonds
There’s a great investment chart I review every year — the Mercer periodic table of investments. The chart ranks the best-performing asset class each year from best to worst. It is a great visual for showing the importance of diversification. What you’ll notice is that no investment asset class stays the best-performing asset class. Commodities were one of the worst investments in 2020, but rallied in 2021 and 2022 to be in the top three. Every dog has its day. Stay diversified.
Step No. 4: Be patient
Long-term stock investors know market volatility — the ups and downs of the market — is part of the game. For putting up with the volatility, you should expect higher returns over time. If you don’t embrace volatility, or some level of risk, and choose instead to stay in cash or CDs, you should expect lower returns over time. Like the wood snake, think gradual growth, be careful about trying to time the market and be patient when investing in the stock market.
Step No. 5: Control what you can control
Investors needing returns from their stock portfolio are on shaky ground. Once the market dips, they might be more willing to sell. That’s not good. Instead, try saving more. Build the cash reserve fund. Pay down debt. Dollar-cost average into a diversified portfolio. Review if you need life or disability insurance to prevent catastrophic income loss. Minimize portfolio taxes like capital gains distributions. Save in the right accounts (401(k) with an employer match and health savings accounts (HSAs), for example). Doing all the little things adds up over time.
Parting thoughts
Like every year, we never know what the next 12 months will bring. However, if the wood snake is any guide, this is the year we need to be patient and have wisdom, and over time, growth and personal transformation are possible. Now that’s something to look forward to this year. Good luck in 2025.
To schedule a complimentary investment portfolio review with the author, visit Portfolio Review Call.
Michael Aloi, CFP, is an independent financial adviser with 25 years of experience in helping clients achieve their financial goals. He works with clients throughout the United States. For more information, please visit www.michaelaloi.com.
Investment advisory and financial planning services are offered through Summit Financial LLC, an SEC Registered Investment Adviser, 4 Campus Drive, Parsippany, NJ 07054. Tel. 973-285-3600 Fax. 973-285-3666.
This material is for your information and guidance and is not intended as legal or tax advice. Clients should make all decisions regarding the tax and legal implications of their investments and plans after consulting with their independent tax or legal advisers. Individual investor portfolios must be constructed based on the individual’s financial resources, investment goals, risk tolerance, investment time horizon, tax situation and other relevant factors. Past performance is not a guarantee of future results.
The views and opinions expressed in this article are solely those of the author and should not be attributed to Summit Financial LLC. Links to third-party websites are provided for your convenience and informational purposes only. Summit is not responsible for the information contained on third-party websites. The Summit financial planning design team admitted attorneys and/or CPAs, who act exclusively in a non-representative capacity with respect to Summit’s clients. Neither they nor Summit provide tax or legal advice to clients. Any tax statements contained herein were not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state or local taxes.
Related Content
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Michael Aloi is a CERTIFIED FINANCIAL PLANNER™ Practitioner and Accredited Wealth Management Advisor℠ with Summit Financial, LLC. With 21 years of experience, Michael specializes in working with executives, professionals and retirees. Since he joined Summit Financial, LLC, Michael has built a process that emphasizes the integration of various facets of financial planning. Supported by a team of in-house estate and income tax specialists, Michael offers his clients coordinated solutions to scattered problems.
-
RMD Deadline April 1: Five Tax Strategies to Manage Your 2025 Income
Taxable Income The April 1, 2025, deadline for required minimum distributions (RMDs) is fast approaching for retirees who turned 73 in 2024.
By Kelley R. Taylor Published
-
Rising AI Demand Stokes Undersea Investments
The Kiplinger Letter As demand soars for AI, there’s a need to transport huge amounts of data across oceans. Tech giants have big plans for new submarine cables, including the longest ever.
By John Miley Published
-
How Much Does Being Rich Matter in Retirement?
After a certain point, having more money in retirement won't make you any happier, new research shows. Instead, physical health, a sense of purpose, and a minimal amount of non-mortgage debt are more relevant.
By Christy Bieber Published
-
The Three Biggest Fears Keeping Retirees Up at Night
Here are the steps you can take to put those fears to rest and retire with confidence so you can relax and enjoy the life you've planned.
By Pam Krueger Published
-
What Can a Donor-Advised Fund Do for You? (A Lot)
DAFs and private foundations go about helping charities (and those who donate) in different ways. Each comes with its own benefits and restrictions to navigate.
By Julia Chu Published
-
Estate Planning When You Have International Assets
Estate planning gets tricky when you have assets and/or beneficiaries outside the U.S. To avoid costly inheritance mistakes, it pays to understand the basics.
By Kelsey M. Simasko, Esq. Published
-
Microsoft Stock: Innovation Spurs Its 100,000% Return
Microsoft's ability to recognize the "next big thing" has allowed sales – and its share price – to grow exponentially over the years.
By Louis Navellier Published
-
Three Essential Estate Planning Steps to Protect Your Nest Egg
After dedicating years to building your wealth and securing your future, make sure your assets are protected and your loved ones are provided for in the future.
By Nicole Farbo, CFP® Published
-
Is Chasing the American Dream Ruining Your Financial Life?
Too many people focus on visible affluence as a marker of success. Here's how to avoid succumbing to the pressure and driving yourself into debt.
By Anthony Martin Published
-
Stock Market Today: Dow Sinks 715 Points as Inflation Unrest Grows
Inflation worries are showing up in both hard and soft data.
By Karee Venema Published