Industrial stocks are often overlooked by investors. They’re just not as exciting as the hottest cryptocurrency or artificial intelligence (AI) play.
I get it. And if your portfolio is underweight industrials heading into 2025 – you’re not alone.
But even though the industrials didn’t make many headlines this year, their performance was still impressive. The Industrial Select Sector SPDR Fund (XLI) is up 22% in 2024 so far. That’s behind the S&P 500’s 28% gain but still a strong showing overall.
Now, the sector isn’t what you may imagine at first…
It’s not full of the old-school industrials that led the manufacturing boom in the 20th century. Yes, Caterpillar (CAT) is one of XLI’s major holdings. But so is global ride-hailing leader Uber Technologies (UBER).
If you’ve been following along here in Market Insights this week, you know that I’ve spent the last few months curating a portfolio of my top 10 stocks to beat the market in 2025. The diverse group covers a variety of megatrends and sectors – as well as both large- and small-cap stocks from around the globe.
The industrial sector is one of the investment themes I expect to outperform next year.
It’s key to the growth and success of megatrends ranging from quantum computing and AI to the “Electrification of Everything.” But most investors don’t realize their potential – or that they’re a great way to play the innovation taking place in the tech sector.
Every portfolio should have exposure to tech stocks. But diversification is key to long-term success in the stock market, and the industrials shouldn’t be ignored heading into 2025.
And it just so happens that the sector has pulled back recently – creating a great buying opportunity worth capturing before the calendar flips in just a few weeks.
The chart above shows the XLI’s pullbacks over the last year. And this week, the fund is sitting at a level that has proven to be a great buying opportunity in the past.
Now, investing in exchange-traded funds (ETFs) like XLI is a solid option for investors. But of its 80 holdings, most aren’t worthy buys. That’s why I’ve handpicked several industrial stocks to include in my top portfolio for 2025 – what I’m calling my Select Portfolio 2025.
I held a special live event to unveil this portfolio earlier this week. But if you missed it, don’t worry. You can click here to watch a replay of the event right now.
Plus, just for tuning in, you’ll get the name of one of my top industrials for 2025 – absolutely free.
Here’s to the future,
Matt McCallEditor, Market Insights
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