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In this episode of ETF Spotlight, I speak with Matthew Bartolini, Head of SPDR Americas Research at State Street Global Advisors. We discuss the market outlook and investing strategies for 2025.

With 2024 almost in the rearview mirror, the big question for investors is whether stocks will continue to march higher after two years of blockbuster gains.

According to State Street, the U.S. economy is expected to maintain its advantage over other developed markets in 2025, driven by advancements in AI development and pro-growth policies from the Trump administration.

Potential risks include trade conflicts and higher inflation due to increased tariffs. However, tax cuts and deregulation are anticipated to support business investment and boost consumer spending.

Matt recommends that investors consider cyclical exposures with domestic-focused businesses, such as U.S. small caps and regional banks, as well as opportunities within the broader AI value chain.

With an expense ratio of just 0.03%, the SPDR Portfolio S&P 600 Small Cap ETF (SPSM - Free Report) is one of the cheapest and most efficient ways to invest in small companies.

As the economic benefits of AI expand beyond the "Magnificent 7," the SPDR NYSE Technology ETF (XNTK - Free Report) and the Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE - Free Report) are worth considering.

XNTK holds 35 leading technology-related companies, including NVIDIA (NVDA - Free Report) , Apple (AAPL - Free Report) , and Tesla (TSLA - Free Report) , which are equal-weighted at each rebalance.

Bonds are no longer providing the same diversification benefit to equities as they did in prior decades, so adding alternatives like gold makes a lot of sense.

The SPDR Gold Trust Trust (GLD - Free Report) remains the most popular gold ETF, but ultra-cheap options like the SPDR Gold MiniShares Trust (GLDM - Free Report) and iShares Gold Trust Micro (IAUM - Free Report) may be more suitable for long-term investors.

Running Length: 00:31:11

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