Beachman's Picks for the chaos of 2025+
Portfolio: Introducing my best stock picks for the next 12-18 months
2025 is going to be a volatile year…we need to be prepared.
Since the pandemic, every year has sported a certain dominant character for markets and investors. Reading these tea leaves and aligning my portfolio accordingly has delivered some of my best investing returns ever…over the past 5 years.
2021 was the year of froth and FOMO. 2022 was the year of higher interest rates. 2023 was the year of recovery and hope. 2024 proved to be the year of rampant speculation in…everything.
2025 is going to be the year of chaos and volatility…and we need to adjust our investing approach accordingly.
Table of contents
2025 is going to be unpredictable
Beachman’s portfolio management approach
Beachman’s picks for 2025+
Conclusion
Follow Beachman
Welcome to the Beachman community, where we follow the most pertinent market signals that you need to know as an investor…AND…the context and the key takeaway for each of these developments.
Beachman’s Newsletter is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.
On the daily, you can find Beachman in three places…
Beachman’s Substack chat line here
Beachman’s Substack feed here
Beachman’s Threads feed here
Please check out the must-reads listed on the About page and the Roadmap page.
2025 is going to be unpredictable
As I said above, 2025 is going to be chaotic, volatile…unpredictable…because we have a new US administration taking office on Jan 20th. This team is hell-bent on changing the status quo without regard for how things were run in the past. This is not a political statement…it is a reality. Whether you like it or not, as an investor you need to be prepared for it.
Why unpredictable?
We will further explore these concepts over the next 12-18 months as the chaos plays out…but here are some potential reasons:
Trade tariffs imposed by the US on other countries and vice versa.
Protectionist policies for US manufacturing, agriculture and services.
Possible resurgence of inflation (due to US economic policies listed above).
Tighter jobs market leading to higher wages & more inflation due to US immigration policies.
Shutting down old wars and opening new battlefronts.
Cutting government spending and eliminating incentives.
Reducing government regulations.
Crypto-friendly policies and actions.
Realigning global alliances.
I am sure that I am missing a few additional factors and Trump will likely add to the list every time he steps in front of a microphone or tweets.
The point being…throw out the existing playbook of what government should look like and behave like. This new US administration has an agenda - some of which has been revealed and chunks of which are still unknown. They are coming to town with their campaign promises.
All of this is going to impact markets and our portfolios…
The closest parallel that I can think of is how the stock market performed between late 1980 to 1982…when Reagan came in to power…bringing with him a somewhat similar change agenda and electoral mandate.
Markets lost -28% during that time frame with several ups and downs in between.
Beachman’s portfolio management approach
If I don’t know what the future holds and I still want to make money, then what should I do?
What’s the best way to construct and manage an investing portfolio such that it outperforms the market in the midst of such uncertainty?
In the words of the great Aristotle, we need to go back to first principles. He described first principles as "the first basis from which a thing is known."
In the case of investing, this means that we go back to core, fundamental data that tells us about how a business is performing and how it is likely to perform in the future. It forces us to make information-based decisions…not guesses…not relying on hope as a strategy. Speculation and assumptions are kept in check.
Here is how I intend to do just that in 2025 and portions of 2026, as needed…
Beachman’s 2025 plan
Lean on my Beach scoring algorithm (which is based on first principles and has been working well) to help me find winners and stay away from losers.
Invest in secular themes and stocks with strong 2025 tailwinds.
Stay over-allocated in mega cap stocks…an oasis of safety in uncertain times.
Stick to a small number of holdings with high conviction (or strongly increasing conviction).
Stay away risky, emerging businesses or story stocks (I am happy to trade them on the side).
Maintain a 20% cash balance - to hedge, speculate and buy the dip.
Use my preferred technical indicators …and… valuations …and… options markets trends…to check and double-check before “buying the dip”.
A few days ago, in my New Year’s post, I resolved to keep things simple and stick to the fundamentals. My 2025 investing plan above translates those first principle goals into actionable guardrails for the next 12-18 months.
2025 needs us to keep FOMO in check and stick to a plan.
This is not the year to F.A.F.O.
Beachman’s picks for 2025+
Introducing my best picks for 2025+.
Paid subscribers can find them in the portfolio file pinned here.
There are 7 themes that I find most interesting for 2025 and using my Beachman scoring algorithm, I identified 21 stocks and ETFs that I am most comfortable owning within each of these sectors.
Most of them are high scoring stocks with solid fundamentals and strong future business prospects. A handful are recovering from a business downturn and ripe for a move higher. All of them (except one) have strong 2025 tailwinds behind their sails.
I currently don’t own all of them and I likely never will. But the goal is to provide you with a broader list that I like for 2025, specifically, with supporting, ACTIONABLE information that you could use to make your own investing decisions.
For each of these stocks, on a regular basis, I will provide Beachman scores, earnings report opinions, preferred BUY price points and TRIM price points, valuation updates, updated stock charts with technical indicators and much more.
The Q4 earnings season kicks off this week and it gives us another opportunity to check if these stocks deserve to stay on the my Beachman’s Picks list and in my portfolio.
Additionally, I will constantly search for new candidates. I already have 13-14 stocks shortlisted for consideration. There is a very high bar for any of these to make it to my picks list and an even higher bar for them to displace an incumbent pick. If you have any suggestions to consider then send them across…drop a comment below or let me know on the chat line.
Conclusion
So, that’s how I will invest in 2025 and likely the first half of 2026.
To be clear, I am not bearish about the next 12-18 months.
In fact, I am quite bullish about the US economy and I plan to stay as invested as possible.
I want my approach this year to be stricter, data-driven, flexible and rules-based, given the growing uncertainty ahead.
More importantly, I think that…
We can make money irrespective of the direction in which the market is going.
Cheers and good luck out there.