Experts have suggested that inflation and interest rates could drop in the next year, pointing to a more stable global economy. This could be good news for borrowers looking to secure a smaller interest rate on any loans – such as a mortgage – and for any spenders wanting to get more for their money with cheaper goods and services. For savers on the other hand, lower interest rates may result in less earnings.
While lower inflation and interest is a good thing for many, 2025 could come with some curveballs. We should start to see some impact from the changes in the UK government’s borrowing rate, the US president’s plans to change fiscal and trade policies, and growing global geopolitical jitters could unsettle the market. All of this makes it difficult to say with certainty what will happen this year.
To make sure you’re covered, it’s good to prepare yourself for the unexpected – especially when it comes to managing your investments. What could you do to set up your investment portfolio in the best way this year?
Diversify your investment portfolio
Having a well-balanced portfolio can be a good way to grow your money. Diversifying your investments can help you benefit from multiple market and industry peaks, whilst limiting your exposure to singular downward trends, when they occur.
There are a lot of options available to investors looking to diversify. Whether that’s stocks, funds, bonds, or commodities.
Let’s take a look at what you can get with Moneybox.
US stocks
When it comes to stocksStocks, also known as shares or equities, represent units of ownership in a company., the US market is the biggest. Wall Street analysts forecast the S&P 500A stock market index that tracks the performance of the 500 largest companies listed on US stock exchanges. – an index of the 500 largest publicly listed US companies – could grow by 9% by the end of 2025 – and it was up over 20% from January 2024 to December 2024.* This is an exciting prospect for any investor looking to grow their returns.
A key thing to understand is that company stocks can be volatile – they’re reactive to unexpected business, industry, and market factors. If you put all your eggs into one basket then it could make for an uncomfortable period as you wait to see positive returns.
If you’re considering investing in stocks then it could be a good idea to buy a few from different companies and sectors.
With Moneybox you can buy a whole range of US company stocks including some from well-known brands like Apple, Tesla, Nike and more. Get started today with a one-off buy or with Weekly Stocks.
Funds
Funds work differently to stocks by grouping together investments in multiple companies, often within a specific industry, country or theme, and allowing you to invest in all of them with a single purchase. Some fundsFunds, also called ‘tracker funds’, are financial instruments that have been set up to match or ‘track’ the price of a market index. Investing in a fund lets you get exposure to different financial assets like shares and bonds, without having to buy them directly. automatically track the performance of an index over time and the price will go up and down against this.
This is a great way to diversifyThe act of spreading your investments over a range of different assets, sectors, and geographical regions. This way, if one of these falls in value, the value of your entire portfolio won’t fall with it. your investments, limit risks, and build your money in a more manageable way over time.
At Moneybox we offer a range of funds allowing you to invest in global and emerging markets, technology, property, commodities like gold, US and UK government bondsThe financial world’s version of an ‘I owe you’, bonds can be issued by companies or governments. You’d invest in bonds to receive an annual interest payment, plus the initial value of the bond back when it ‘expires’., as well as funds with an environmental, social, and governance (ESG) focus and more.
Explore the investment choices you have with Moneybox today.
Capital at risk. All investing should be long term. The value of your investments can go up and down, and you may get back less than you invest.
Tax treatment depends on individual circumstances and may be subject to change in the future.
*Google Finance, January to December 2024