3 Places To Profit (That Are NOT Tech!)
News Summary
Amid recent underperformance in technology stocks, this article explores new investment opportunities for 2025, featuring insights from two MoneyShow experts: Nicholas Bohnsack of Strategas Securities and Amy Zhang of Alger. Nicholas analyzes the market implications of monetary policy, inflation, and labor market pressures, sharing his favored investment themes. Amy Zhang explains why and where small and mid-cap (SMID) stocks are quietly outperforming, emphasizing the value of in-depth research in the SMID space, and highlighting overlooked sectors and companies. The article recommends two non-tech investments: the Tweedy, Browne Insider and Value ETF (COPY) and Primerica Inc. (PRI). COPY is an ETF focused on value, international, and small-cap stocks, characterized by low price-to-book and price-to-earnings multiples, share repurchases, a small-cap orientation, above-average dividend yields, and out-of-favor, mispriced stocks. Primerica (PRI) is a financial services company providing term life insurance, mutual funds, and annuities to middle-income households, boasting a 15.6% compound annual EPS growth over the past decade, maintaining a low dividend payout ratio, and expecting approximately 10% annual EPS growth.
Background
In 2025, technology stocks have underperformed, leading investors to sell their previous winners and rotate into lagging sectors. Against this backdrop, finding new profit opportunities has become a key focus for investors. Experts are discussing the implications of monetary policy, inflation trends, and labor market pressures on markets in 2025, alongside macroeconomic forces like deglobalization and the rising influence of AI. US companies have announced a record-breaking amount of stock buybacks, indicating strong corporate cash flow and confidence in their own valuations. Concurrently, despite rhetoric around deglobalization, foreign investment into US assets remains robust, significantly outpacing US investments abroad, with foreign entities owning substantial portions of US government bonds and the stock market, signaling continued global attractiveness of US assets.
In-Depth AI Insights
Given the current market environment, why should investors consider non-tech stocks, and what macroeconomic forces are reshaping the investment landscape?\n\n- The recent battering of technology stocks has prompted a rotation of capital into previously lagging sectors, signaling a significant market shift where investors should avoid overconcentration in single high-growth areas.\n- Adjustments in monetary policy, persistent inflationary pressures, and labor market dynamics are collectively forming the primary market drivers for 2025, often favoring value and cyclical industries sensitive to interest rates and economic cycles.\n- The trend of deglobalization is altering supply chains and production models, likely benefiting companies that can capitalize on localization or possess strong domestic markets, rather than tech giants reliant on globalized efficiency.\n\nWhat specific investment strategies do the recommended Tweedy, Browne Insider and Value ETF (COPY) and Primerica Inc. (PRI) embody, and why are these strategies appealing in 2025?\n\n- The COPY ETF exemplifies classic value investing by focusing on undervalued stocks (low price-to-book, low price-to-earnings), share repurchases, a small-cap orientation, high dividend yields, and out-of-favor securities. These characteristics promise a higher margin of safety and potential outperformance as the market seeks non-tech returns.\n- Primerica (PRI), as a provider of life insurance and financial products, offers a defensive and stable cash flow investment. Its consistent growth (15.6% CAGR EPS over a decade), low payout ratio, and future growth driven by sales force expansion and share repurchases make it an attractive option for investors seeking steady returns in an increasingly uncertain market.\n\nWhat are the deeper implications of sustained foreign capital inflows into the US and the surge in corporate stock buybacks for the long-term health and investment appeal of the US market?\n\n- Since 2006, foreign investment in US assets has significantly outpaced US investment abroad, coupled with substantial foreign ownership of US government bonds and stocks. This indicates that the US economy and financial markets remain a global safe haven and a core asset allocation destination for international investors, maintaining strong long-term appeal even amidst deglobalization narratives.\n- The nearly trillion-dollar corporate stock buyback wave reflects robust US corporate profitability, healthy balance sheets, and management's confidence in future prospects. This not only boosts EPS but also signals positive sentiment to investors, supporting stock prices, particularly in non-tech sectors, and demonstrating broader corporate value creation.