Investment Experts: Types of Stocks You Should Consider Dumping in 2025

If you are a stock market investor, it’s always a good idea to regularly check in with your portfolio, especially with so many outside forces, both political and economic, influencing the market and your investment decisions. Making changes during times of economic volatility isn’t always a sure-fire decision, but it could be a good time to consider locking in any losses or gains. And according to investing experts, some stocks could be worth dumping all together.

Contents

Defense Contractors Renewable Energy Import-Dependent Firms Discretionary/Luxury Consumer Goods Final Take To GO: Exercise Caution

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If any of these companies are in your portfolio, it could be the time to reevaluate what you’re investing in.

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Defense Contractors

Big defense contractors have typically been pretty safe bets in the stock market, although Boeing’s struggles last year during a rising market clearly show that isn’t always the case. Peter C. Earle, senior economist for the American Institute for Economic Research, sees possible trouble ahead for the industry.

“Should the incoming Trump administration follow through on its pledges to force other nations to fend for themselves, the largest publicly traded defense contractors might be poised for a pullback: Lockheed Martin (LMT) and Raytheon (RTX),” Earle said.

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Renewable Energy

Earle also sees risk in the green energy sector, noting that the Biden administration’s Inflation Reduction Act provided for a large amount of subsidies for renewables. “If those are reduced or eliminated, many of the solar, wind and alternative energy source firms will be in serious jeopardy. Two of those may include Enphase Energy (ENPH) and NextEra Energy (NEE),” Earle said.

Import-Dependent Firms

Earle also noted that a cornerstone of the Trump administration is tariffs and other forms of trade protectionism — a term for government policies that restrict international trade with the intent of helping domestic industries. Such measures are often controversial because of the unintended consequences that can arise from them.

“If tariffs of the type which have been discussed are put in place — 60%, 100%, 200% and so on — retaliatory tariffs would follow. Those could, in turn, devastate companies that rely on imports: consumer electronics firms, automobile manufacturers, medical device makers and discount retailers. Those could include, among others, Boston Scientific (BSX), Walmart, which imports 70% to 80% of its goods from Chinese suppliers (WMT) and Sony Corporation (SONY),” Earle said.

Discretionary/Luxury Consumer Goods

In an inflationary and high-interest-rate environment, businesses that sell nonessential goods and services are often negatively impacted. Derrick Fung is the CEO of Signals, an investment intelligence platform that analyzes consumer spending trends to help investors anticipate market movements. According to his data, there has been a notable downtrend in these “nice to have” products. In particular, his platform has issued a “sell” signal on stocks like Coty (COTY), Arhaus (ARHS) and Victoria’s Secret (VSCO).

You may not be familiar with fashion and beauty holding company Coty, but you are certainly familiar with their brands. Luxury brands like Burberry, Tiffany and Calvin Klein, as well as consumer brands like Adidas Covergirl all fall under the Coty umbrella. Arhaus is an online and brick-and-mortar retailer of responsibly sourced premium home furnishings. Victoria’s Secret is of course an iconic specialty retailer of lingerie and sleepwear.

“Our data has been showing a downtrend on all the names above. [All of them] are based on the brand being trendy; all of the names have started to lose their appeal either to a competitor (for example, Coty to Elf Beauty, Lululemon to Alo Yoga) or the category as a whole is seeing a secular decline,” Fung said.

Final Take To GO: Exercise Caution

“Predictions have an uncanny knack for making fools of all of us. Other circumstances may arise which make any of all of these projections erroneous or irrelevant,” Earle said. It’s important to remember that predicting the future is hard to do. Be careful that you don’t overreact to trends that are ultimately fairly short-term.

Earle strongly recommends that investors speak with their financial advisor before making any major decisions on whether or not to buy, sell or hold. A professional advisor can help you make the investment moves that are right for your unique situation, regardless of everything happening in 2025 and beyond.

Caitlyn Moorhead contributed to the reporting for this article.

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