In a matter of weeks, market sentiment has moved from panic to nearly manic.
Back in April, recession odds were more than 50% and the stock market was in free fall. But after fears concerning the president’s trade wars and economic policy eased, stocks have return to all-time highs in record time.
It took just 57 days for the S&P 500 to claw its way out of a bear market to hit an intraday high — igniting animal spirits — but financial advisers surveyed by Bloomberg say everyday investors should tread lightly. Wall Street pros caution that many risks remain. But there are still promising areas of investment.
Here’s more on how advisers are answering top questions from clients:
Is now a bad time to buy?
The resounding answer from advisers: It’s definitely not too late — assuming you’re a long-term investor.
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As long as you don’t need the money for at least three years, wealth managers say buying stocks during a rally can be a smart move.
Strong performance often leads to further market strength, said Dustin Suttle, co-founder of Suttle Crossland Wealth Advisors. “All-time highs can feel like a signal to wait for a pullback, but history shows the market often moves higher from record levels.”
There are powerful psychological forces at work here, added Noah Damsky, principal at Marina Wealth Advisors. Investors get excited about new highs and jump in, which in turn drives stocks higher.
He considers a record high to be “a sign to buy, not to wait on the sidelines.” In fact, he said waiting on a dip can cost you in long-term performance. That’s especially the case now, with yields on cash-like products falling alongside expectations for interest-rate cuts.
Where are the best buying opportunities now?
Wary of risk levels, Emily Roland at Manulife John Hancock Investment Management recommends investing in high-quality stocks with more stable earnings and stronger balance sheets. This can often include tech firms, but she also likes those in the health care and utilities sectors, along with infrastructure companies that produce toll roads and data centers.
“It’s things people need versus things they want,” said Roland, the firm’s co-chief investment strategist. She’s also more bullish on US stocks than European ones, especially after Europe’s rally earlier this year and its disappointing earnings season.
Meanwhile, Scott Helfstein, head of investment strategy at Global X, said he sees opportunities in companies that produce defence technology, along with cybersecurity firms. He recommends utility companies and those involved in producing uranium and nuclear power, due to the increasing need for energy to power artificial intelligence and automation.
What should I do if I sold stocks earlier this year?
The first thing you should do is analyze why you sold in the first place, said Robert Jeter, a financial adviser at Back Bay Financial Planning & Investments. If it was a knee-jerk reaction that you now consider a mistake, think about why that happened and how you can avoid it next time.
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In terms of getting back in, he suggests dollar-cost averaging — making small investments over a period of time instead of dumping in a large lump sum. That can feel less risky psychologically, and help create a positive habit for the future. Plus, the next time you feel like there is a dip in the market and want to buy, you have the extra cash to do so.
Samantha Mockford, associate wealth adviser at Citrine Capital, also recommends viewing past selling mistakes as a learning opportunity for the future. If you’re prone to anxiety during market drops, consider ways to avoid that next time.
“The simple act of not auto-filling your login credentials for your custodian’s website could be enough of an inconvenience to keep you from checking your accounts,” she said.
And if you did sell earlier this year, there’s one upside: You may be able to lower your tax bill by harvesting losses to offset capital gains from other profitable sales.
What could derail the rally?
Wall Street pros including Bank of America Corp.’s Michael Hartnett and Citigroup Inc.’s Kate Moore have warned traders are ignoring risks to the market, including the impact of tariffs. Moore said recently she is “uncomfortable” with the rally, fearing investors are downplaying President Donald Trump’s tariff policies and the ongoing conflict in the Middle East.
The full impact of tariffs is uncertain. However, corporate earnings expectations are reflecting concerns. Wall Street analysts expect profits at S&P 500 companies to rise 7.1% this year, which is down from nearly 13% at the start of 2025, according to Bloomberg Intelligence.
Market concentration is another concern as well, as just a handful of tech companies including Nvidia Corp., Microsoft Corp. and Meta Platforms Inc. are driving the bulk of market gains. Many fear valuations are looking stretched and that if any one of those companies were to take a hit, the overall market would suffer.
Interest-rate cuts from the Federal Reserve could help bridge the gap between prices and fundamentals, according to Bloomberg Intelligence strategists Gina Martin Adams and Michael Casper. But that’s far from guaranteed.
Fed Chair Jerome Powell has said the central bank is in no rush to lower rates. Officials are planning two interest-rate cuts this year. But any delays or surprises on that front could weigh heavily on stocks.
Should I buy crypto?
Bitcoin has surged more than 15% this year, continuing a blistering post-election rally. Traders are optimistic Trump’s crypto-friendly administration will be a boon to the industry.
For those considering adding to their crypto holdings, or investing for the first time, advisers recommend strict limits.
Jeter at Back Bay Financial said investors should first decide how much of their portfolio they want to allocate to crypto — he recommends no more than 10% — and then stick to that limit, making sure it’s not money that will be needed anytime soon.
“The extreme volatility of those assets will be problematic for even the most seasoned investors,” he said. “While we all like to pretend we never need our money, eventually we do.”
