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Despite some wobbles early in January, the S&P 500 closed at a new all-time high on Thursday. And even though the indexes pulled back marginally on Friday, by week’s end the S&P 500 had gained 1.7%, the Dow had rallied 1.83% and the Nasdaq had added 1.53% (though the Nasdaq got hit again on Monday, led lower by AI stocks).

It’s been another solid, encouraging week for the market, with the major indexes all sporting solid gains—the big-cap indexes were up 2% or while the broader indexes are in the black by a bit more than 1%.

WHAT TO DO NOW: The popular AI stocks were hit extremely hard today on fears that the CapEx spending boom could be cut short following the DeepSeek successes, which in turn dragged the major indexes lower. Outside of AI, the damage was reasonable, which is a plus, but with the major indexes still trending sideways and few stocks decisively moving higher, we’re remaining relatively cautious. In the Model Portfolio, we’re forced to quickly cut our loss in Marvell Tech (MRVL), which was caught up in the out-of-the-blue selling storm among AI stocks. Our cash position will now be around 53%.

Despite some wobbles early in January the S&P 500 closed at a new all-time high on Thursday. And even though the indexes pulled back marginally on Friday, by week’s end the S&P 500 had gained 1.7%, the Dow had rallied 1.83% and the Nasdaq had added 1.53%.

2024 was another great year for the markets, but it also left us with some lasting lessons we can use going forward. So, here are the four “Dos” and “Don’ts” I’m taking away from 2024.

Concentrated investment in the largest stocks has made this market historically top-heavy, but adding these three ETFs to your portfolio can help balance your exposure to mega-cap stocks.

Small caps are up a very, very small amount over the last week. In fact, the S&P 600 SmallCap Index has hardly moved over the last five sessions.

I think that’s remarkable given everything that’s gone on lately.

The DeepSeek drama inspired a truly magnificent wipeout for the broad market on Monday. And we had an FOMC meeting yesterday that barely registered on the S&P 600.

January has lived up to its reputation in 2025, with plenty of volatility, cross-currents and news-driven moves, highlighted by this week’s huge AI infrastructure selloff and partial recovery while the broad market improved.

WHAT TO DO NOW: It’s been a typically volatile January, with this week’s huge convulsions among AI stocks the latest crosscurrent to deal with. Overall, the top-down evidence is mostly neutral at this point, and leading stocks are in a similar boat as last week—improving, but without much decisive buying so far. To be fair, we’d like to put some money to work and could do so soon (next day or two) if we get the right setup, but tonight we’ll stand pat and look for signs big investors are getting involved. In the Model Portfolio, we cut our loss in Marvell (MRVL) on a special bulletin Monday, though most of our stocks are acting well and tonight we’re placing On Holding (ONON) back on Buy as it looks to be resuming its overall uptrend. Our cash position is right around 50%.

The IPO market has improved markedly in the last two years and is on track to heat up even more in 2025, which makes these two stocks names to watch.

European stocks are lagging the performance of their American counterparts, and have been for years. But that performance gap offers attractive valuations for investors looking to add portfolio diversification.

Sell AST SpaceMobile (ASTS)

Tracking where the most aggressive investors are putting the most money is a good measure of the risk appetite for the market, and these three sectors say the bull market is alive and well.

Progress on federal-level cannabis reform remains uncertain and demands patience from investors. In Cabot Cannabis Investor, we’re getting paid to wait.

2023 and 2024 were great years for investors, and despite some uncertainty in the market of late, investors would be wise to approach 2025 with optimism for continuing strength.

DeepSeek: “Gift to the World” or Nightmare for U.S. AI Ambitions

The attention of activist investors can help catalyze major changes at underperforming companies, and these two big-name companies are attracting it in spades.