How to layout under the encryption-friendly policy? 2025 Investment Guide: New highs in US stocks and Bitcoin allocation strategy.

Market sentiment has shifted from panic to frenzy, how should investors respond? In just a few weeks, market sentiment has turned from panic selling to almost frenzied excitement.

In April, the probability of economic recession exceeded 50%, and the stock market experienced a free-fall decline. However, as concerns about the president's trade war and economic policies eased, the stock market returned to historic highs at a record pace.

The S&P 500 index climbed from the depths of the bear market to an intraday high in just 57 days, igniting market animal spirits. However, financial advisors surveyed by Bloomberg recommend that ordinary investors exercise caution. Wall Street professionals warn that market risks remain, but there are still potential investment areas.

Bloomberg summarized the responses of several advisors to the most concerned questions from clients:

1. Is it too late to enter now?

The unanimous response from the consultants is: it's definitely not too late — provided that you are a long-term investor.

Wealth management experts suggest that as long as you do not need to use these funds for at least the next three years, buying stocks during the market rebound period is still a wise move.

Dustin Suttle, co-founder of Suttle Crossland Wealth Advisors, pointed out: "Strong performance often indicates that the market will continue to strengthen. Historical peaks may make one want to wait for a pullback, but history shows that the market often continues to climb from high levels." Noah Damsky, head of Marina Wealth Advisors, added that there are strong psychological factors at play here: investors are excited to enter due to new highs, thereby pushing prices higher.

He believes that a historical new high is a "buy signal, not a wait-and-see signal." In fact, waiting for a pullback may harm long-term returns, especially as cash-like product yields decline with the expectation of interest rate cuts.

2. Where are the best investment opportunities currently?

Due to a vigilance regarding risk levels, Emily Roland from Manulife/John Hancock Investment Management recommends investing in high-quality stocks that have more stable earnings and stronger balance sheets. This typically includes technology companies, but she is also optimistic about healthcare, utilities, and infrastructure companies involved in building toll roads and data centers.

The co-chief investment strategist of the company stated: "Invest in what people must rather than what they want." Compared to European stocks, she is more optimistic about U.S. stocks, especially after Europe experienced a rebound earlier this year and the earnings season turned out disappointing.

At the same time, Scott Helfstein, the investment strategy director at Global X, noted that he sees opportunities in defense technology and cybersecurity companies. Given the surge in energy demand driven by artificial intelligence and automation, he also recommends utility companies and businesses involved in uranium and nuclear power production.

3. What should you do now if you sold stocks at the beginning of the year?

Robert Jeter, a consultant at Back Bay Financial Planning and Investment Company, suggests first to analyze the reasons for the initial sell. If it was an impulsive decision and now feels like a mistake, one should think about the reasons and how to avoid it in the future.

For re-entering the market, he recommends using Dollar-Cost Averaging—that is, making small incremental investments over a period of time instead of a large one-time investment. This can alleviate psychological risk and help cultivate positive investment habits. Moreover, when the market dips next time and you want to buy, you will also have extra cash available.

Citrine Capital's Associate Wealth Advisor Samantha Mockford also recommends viewing past selling mistakes as future learning opportunities. If you tend to feel anxious during market downturns, you should find ways to avoid repeating such mistakes.

She suggested: "A simple approach is not to save login credentials on hosting sites, increasing the inconvenience of accessing the account, which may prevent you from making impulsive actions."

If you did indeed sell at the beginning of the year, there is another benefit: you can use Tax Loss Harvesting to offset capital gains from other profitable trades, thereby reducing your tax burden.

4. What factors might end this round of rebound?

Wall Street professionals, including Michael Hartnett of Bank of America and Kate Moore of Citigroup, warn that traders are ignoring market risks, including tariff impacts. Moore recently expressed that she feels "uneasy" about this round of rebound, worrying that investors are underestimating President Trump's tariff policies and ongoing Middle East conflicts.

The full impact of tariffs remains uncertain. However, corporate profit expectations have reflected concerns. Bloomberg Industry Research data shows that Wall Street analysts expect S&P 500 companies to see profit growth of 7.1% this year, down from nearly 13% at the beginning of 2025.

Market concentration is another major concern. Currently, only a few tech giants such as Nvidia, Microsoft, and Meta are responsible for most of the market gains. Many are worried that valuations are too high, and if any of these companies falter, the entire market will be affected.

Bloomberg industry research strategists Gina Martin Adams and Michael Casper believe that the Federal Reserve's rate cut measures may help bridge the gap between prices and fundamentals, but this is far from certain.

Federal Reserve Chairman Powell has stated that the central bank is not in a hurry to cut interest rates. Officials plan to lower rates twice this year, but any delays or surprises could weigh heavily on the stock market.

5. Should you invest in cryptocurrency now?

Bitcoin has soared over 15% this year, continuing its strong upward trend after the election. Traders are optimistic that a pro-cryptocurrency government under Trump will benefit the industry.

For investors considering increasing their holdings or making their first investment in cryptocurrencies, advisors recommend strictly setting a limit.

Jeter from Back Bay Financial advises investors to first decide what proportion of their portfolio to allocate to cryptocurrencies (he recommends no more than 10%) and to strictly adhere to this limit, ensuring that the funds invested are long-term idle funds.

He stated: "The extreme volatility of these assets is a challenge even for the most seasoned investors. While we all pretend we don’t need to touch this money, there will ultimately come a time when we do."