With 2025 just getting started, now’s a good time to reflect on 2024. Ideally, you’ll look back fondly at the year that was while eyeing a handful of areas of opportunity.
The calendar flipping is the impetus for resolutions after all.
Eat better…
Drink less…
Spend less time sitting around and more time at the gym…
You know the drill.
Of course, most of us struggle to make those changes stick, and oftentimes the new resolution is just a variation on last year’s.
No judgment here, I’ve been there myself.
But, with 2024 rapidly shrinking in the rear-view mirror, I wanted to offer up a handful of “Dos” and “Don’ts” for 2025.
You can call them resolutions if you’d like, but, in truth, they’re only partially resolutions. They’re also lessons learned from 2024 that I plan on implementing into the future.
So, without further ado, let’s get to them…
Do: Go Against the Market “Consensus”
Twice this past year, my colleague Brad Simmerman and I hosted a round-table of Cabot analysts on our weekly Street Check podcast in which every single analyst on the panel was bullish. Mind you, they weren’t wrong to be so: the market was in very good shape at the time of recording, and the bull market has indeed kept marching along.
But both times, the market pulled back in the short term – including a pronounced downturn the second of July and early August after a particularly bullish “consensus” was formed on a mid-July podcast. It’s not quite the equivalent of when my Uber driver is asking me about stock tips, it’s time to sell. But it is a soft version of that.
The opposite is also true. When everyone is bearish, that’s typically a good sentiment measure that often precedes a fresh round of buying. There weren’t many of those last year, though we may be nearing one now after a rough December and spotty start to 2025.
Being a contrarian is an often profitable approach to investing – a fancier version of the old “buy low, sell high” adage.
Don’t: Take the Bait on Bitcoin
The bull market is just over two years old, and while the S&P 500 has posted back-to-back years of better than 20% growth, Bitcoin has ridden the wave to 155% gains and 121% gains, respectively, in 2023 and 2024. The digital currency rose as high as $106,000 last month, a new record, before pulling back with the market.
Bitcoin has no real-world utility. You can’t use it to buy groceries, pay bills, or go to the movies. It’s strictly a bull market play. And while I do believe the bull market will remain alive and well this year, I think the returns will be more muted, at least at the major index level (maybe +10-15% for the S&P).
That probably won’t send Bitcoin to the stratosphere the way the last two years have. And the downside risk in Bitcoin is too great to buy at such elevated levels.
If you buy Bitcoin here and hold it for the next year, chances are you’ll make money. But eventually, Bitcoin prices will start to collapse – fast – just as they did in 2018 and 2022. So to me, the upside in Bitcoin near all-time highs is not enticing enough to counteract the potential downside.
Don’t: Buy Cannabis Stocks Until a Strong Catalyst Appears
For me, cannabis stocks have entered the “prove it” stage.
I’ve been high on the sector (pun fully intended) for years, because it’s a market that didn’t exist – legally – until a few years ago, and the demand isn’t waning. But cannabis stocks have been in the dumps for almost four years now and are trading at less than one-tenth of their early-2021 peak.
Sure, there were some encouraging signs of life last year, namely when it seemed like rescheduling – from a Class I drug lumped in with the likes of heroin, cocaine and LSD – to the far less harmful Class III category – was all but a sure thing last fall.
Then, it didn’t happen, and who knows when it will. The Amplify Alternative Harvest ETF (MJ), which acts as a de facto proxy for the cannabis sector, spiked as high as 4.8 last April and May, up from the mid-3s to start the year. It’s now all the way down in the low 2s, which is about as low as it’s ever traded.
You could argue that cannabis stocks thus have nowhere to go but up. But I’ll believe it when I see it.
Do: Take Advantage of Your Company’s 401(k) Match
This one is a little bit more “good advice” than “lessons learned,” but it’s also the only one that will make sure you don’t miss out on “free money.”
If you’re in the working world, chances are you work for a company that offers a 401(k) retirement savings plan that allows you to invest a portion of your paycheck before taxes are deducted.
And chances are, your company offers a “match” option, meaning it will match up to a certain percentage of whatever you have taken out of your paycheck. Some will offer a 6% match, some a 3% match, some perhaps as low as 1-2%.
Regardless, you should take advantage of the match – it’s free money! You have to invest a certain percentage of your paycheck to earn the match, but the few less take-home bucks you get every two weeks are worth it for the extra money it gives you access to in retirement.
Your retired self will thank you someday!
