It’s difficult to predict market trends late in 2025, but assuming the current trends will carry over to the beginning of the new year, we can identify some good sectors for Canadian investors to invest in.
The tech sector
The tech sector and individual tech stocks like CGI (TSX:GIB.A) have increased steadily for the past several months. This IT and business consulting stock has increased 16% in the last six months. Assuming it might continue at this pace, the stock can offer you about 30% returns in the next year and double your capital in the next four years.
While CGI is a healthy pick from the sector and a relatively conservative growth stock, you can benefit from this sector’s bullish trend via another stock, too. The index has risen over 37% in just the last six months, and most of that growth took place in just the last three months, so the chances of most tech stocks making a strong entry into 2025 are quite decent.
The consumer discretionary sector
The consumer discretionary sector has performed well in the last few months, and the momentum is likely to continue into the next year. This is especially true considering the interest rate cuts that may trigger more discretionary spending. The cuts won’t directly impact companies like Magna International (TSX:MG), but the impact will eventually reach them.
The stock is currently growing at a decent pace—about 19% in the last three months. But it’s also heavily discounted from its five-year peak and trading at roughly half its five-year peak valuation. This has made its dividends quite inviting, at a yield of around 4.2%. While it’s not counted among undervalued stocks per se, the price-to-earnings ratio of 11.8 is another compelling reason to consider this stock.
The healthcare sector
There is one potential reason to buy into healthcare stocks, or more accurately, marijuana stocks in 2025—new leadership across the border. The president-elect is friendly toward federal marijuana legalization, and this can give a significant boost to stocks like Tilray Brands (TSX:TLRY) that already have a presence in the country.
The current abysmal state of the stock is also worth considering. It’s trading at a 92% discount from its five-year peak and a price of $1.7 per share. The market valuation is gradually inching towards the lower end of small-cap stocks.
However, one benefit of this discount is that even a modest bit of optimism in the market may send this stock shooting upwards. A U.S. federal marijuana legalization can efficiently serve as that bullish catalyst.
Foolish takeaway
The reasons vary from current momentum to international factors, but the three sectors are worth tracking in 2025. Factors like low interest rates may also impact the real estate sector if you seek more promising investment avenues.
