The financial preparation for the next year is heating up before we take leave for the holidays. This year was all about interest rate cuts, artificial intelligence, and oil stocks. What trends could drive the TSX in 2025? The rate cuts could continue into next year and revive consumer demand that has dipped to a record low.
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Which sectors will be in focus in 2025?
You could see an uptick in real estate transactions and technology spending, and anything that grows in a strong economy. I am skeptical about auto stocks as elevated gasoline prices and the challenges with electric vehicles (EVs) could keep car sales divided. Moreover, the outcome of the U.S. elections and government policy support will play a major role in the automotive market recovery.
Two stocks that could help you get richer in 2025
With a strong macroeconomic background and more income at disposal, the below stocks could see their share prices appreciate in 2025.
Descartes Systems stock
Descartes Systems (TSX:DSG) stock is trading at high valuations as it rides the seasonal rally. The supply chain management and logistics software has been growing its e-commerce offerings as there is ample scope due to logistics challenges. An improvement in economic conditions will increase trade and consumer spending and send Descartes Systems on its 20% average annual growth rate.
You could add these stocks to your watchlist and buy when there is a correction. I would suggest a wait period because the stock has already begun its seasonal rally. The U.S. elections, holiday season, and easing interest rates have sent e-commerce and related stocks up. If you already own Descartes Systems stock, you could consider booking some profit in December when the stock is at a seasonal peak.
A correction is likely in January 2025 as U.S. trade policies become clearer. Descartes could return to its rally once the impact of elections subsides.
Magna stock
Magna International (TSX:MG) is another stock that could make you richer in 2025 after four years of decline. The last time the stock surged 100% was after Joe Biden was elected the U.S. president. We are back to the same scenario where the presidency has changed hands. This time, car sales could pick up as interest rates ease.
Several policies of U.S. president-elect Donald Trump could boost consumer spending and boost jobs. While electric vehicles (EVs) may not be at their sweet spot under Trump’s presidency and could also lose subsidies, hybrid and gasoline cars could continue to see an uptick in sales. Trump administration could impose tariffs on the import of Chinese cars. However, it could allow Chinese makers to make cars in the United States. Such policies could bring more business to third-party automotive makers like Magna.
Now is the right time to buy Magna stock as it has just begun its recovery rally. The stock will rally over the anticipation of the policies proposed during the election. You could consider buying the stock now when it trades a little above $60 and selling it when the stock price reaches $110. Avoid holding the stock for the long term, as the automotive sector has limited upside.
The bottom line
You could make the above stocks a part of your big goal of becoming rich. You can break down the bigger goal into smaller goals of becoming richer every year or every quarter. Staying consistent with this can help you become a millionaire in the long term and even build you a robust income base.
