Investment Outlook 2025: A Conversation with Allspring Global Investments’ Bryant VanCronkhite
As we approach the new year, investors are eagerly awaiting insight into the top investment outlooks and market risks that lie ahead. In this article, we sit down with Allspring Global Investments senior portfolio manager Bryant VanCronkhite to discuss his views on the markets in 2025.
Investor Complacency: A Growing Concern
One of the most pressing concerns for VanCronkhite is investor complacency, particularly when it comes to the Magnificent Seven tech stocks. These companies have delivered tremendous returns in recent years, but VanCronkhite warns that investors may be overlooking the risks associated with their valuations.
"That’s a risk because the market is broadening out right now," he explains. "We don’t want to pay as much of a multiple for companies that are growing slower compared to the broader market."
VanCronkhite acknowledges that these tech stocks have been driving the market higher, but cautions against getting caught up in the momentum. Instead, he advises investors to be strategic and not get too comfortable with their current holdings.
"That doesn’t mean sell it; it doesn’t mean leave," he says. "Just be careful about staying too long. Rotate down."
Sector Opportunities: Where to Look for Growth
While VanCronkhite is cautious about the tech sector, he sees opportunities in other areas of the market. He highlights materials and healthcare as sectors with attractive valuations that could outperform in 2025.
"These two sectors have been underinvested in, and they’re starting to gain some traction," he notes. "We think they have a good chance of outperforming the broader market."
In contrast, VanCronkhite is less optimistic about the banking sector, describing it as "nerve-racking" despite market optimism.
"I’m not sure I would be buying any bank stocks right now," he admits. "They’re still trading at pretty high multiples, and they’re not producing a lot of earnings growth."
Rotating Down: A Strategic Approach
VanCronkhite’s advice to investors is to take a strategic approach to their portfolios in 2025. Rather than trying to time the market or make bold bets on individual stocks, he suggests focusing on broader themes and trends.
"Don’t try to pick winners," he advises. "Focus on being right on the big picture."
To do this, VanCronkhite recommends rotating down into sectors that are underinvested and have attractive valuations. This might mean selling some of your tech holdings and buying into materials or healthcare stocks.
"It’s not about being smart; it’s about being strategic," he says. "It’s about understanding the market and where the opportunities lie."
The Future of Small Caps: Will They Rebound in 2025?
One area that VanCronkhite believes will rebound in 2025 is small caps. He notes that these companies have been underperforming relative to their larger counterparts, but sees signs of improvement on the horizon.
"I think small caps are going to do better than people expect," he predicts. "They’re just starting to get some traction."
VanCronkhite points out that small cap stocks have historically been a source of growth for investors, and believes they will continue to play an important role in 2025.
The Risks Ahead: What Investors Should Watch Out For
As we look ahead to 2025, VanCronkhite identifies several key risks that investors should be aware of. These include:
- Market volatility: VanCronkhite notes that the market has been volatile in recent years, and expects this trend to continue in 2025.
- Earnings growth: With valuations high across the board, VanCronkhite is concerned about earnings growth in 2025.
- Geopolitics: The ongoing trade tensions between the US and China, as well as other global hotspots, pose a significant risk to investors.
Conclusion
As we head into 2025, it’s clear that investors face a complex set of challenges and opportunities. By taking a strategic approach and focusing on broader themes and trends, VanCronkhite believes investors can navigate these risks and achieve their goals.
"Don’t try to pick winners," he advises. "Focus on being right on the big picture."
By following this advice and staying informed about market developments, investors can position themselves for success in 2025.
Related Resources
- Yahoo Finance Video: Why Investors Will ‘Regret’ Not Owning Small Caps in 2025
- CoinDesk: Bitcoin Below $93K After $300B Wipeout
- Wealth: Expert Insights and Analysis on the Latest Market Action
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