If you can keep your emotions in check, the volatility in stocks sets up a long-term buying opportunity. However, investors with a lower risk tolerance may want to consider defensive investments that keep them in the market. In 2025, that may mean it’s time to invest in bonds.
Historically, stocks and bonds have an opposite correlation. For much of the last 15 years, historically low interest rates have been great for stocks, particularly technology stocks, but bonds weren’t a great investment. But in a higher-for-longer interest rate environment, this asset class may be making a comeback.
