Rebalancing Your Portfolio for 2025? 3 Growth Stocks to Consider

2025 has brought exciting rebalancing opportunities to sell the rally and buy the dip. Here is a look at some of these stocks.

Puja Tayal

Author Bio

Puja Tayal grew up in a small-business family where dinner conversations often centred on working capital and savings. Her early experiences with investing, particularly during the 2008 financial crisis, shaped her approach to understanding markets and evaluating investment opportunities. She began her career at a mutual fund company before moving into investor education and financial writing for asset and wealth management firms. Before joining The Motley Fool, Puja wrote for Market Realist, where she extensively covered the semiconductor industry. Her published work has also appeared in The Indian Express. Puja believes every stock has a story that can help investors understand its potential returns. She combines business analysis with different investing approaches to help investors make informed decisions and align their portfolios with their long-term financial goals. Outside of finance, Puja enjoys long drives, catching up with friends, watching superhero and science-fiction movies, and managing her family portfolio. She also has a keen interest in artificial intelligence and its potential to reshape the world.

Education

Bachelor's degree in Accounting and Finance, University of Mumbai (2007)
CFA Level I

Areas of Expertise

Qualitative company analysis, management strategy, risk assessment, long-term investing, portfolio diversification and rebalancing, dividend reinvestment, cyclical growth opportunities, compounding strategies, growth stocks, and dividend stocks.

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Favorite Investment Quote

"Risk comes from not knowing what you're doing." — Warren Buffett

Published January 6, 2025 4:30 pm EST

The Toronto Stock Exchange welcomed the new year on a positive note. The TSX Composite Index climbed 1% in the first week of January. As the year unfolds, it is time to rebalance your portfolio to cash in on the stocks that have outgrown and become overvalued and invest in those with significant growth opportunities. In layman’s terms, it is time to sell the rally and buy the dip.

dividend growth for passive income — Source: Getty Images

Upcoming events in 2025

We will not try to predict 2025 as many moving pieces could significantly alter the forecast. Firstly, the upcoming policies by U.S. president-elect Donald Trump around import tariffs, corporate taxes, and immigrants could alter the course of some sectors. Political uncertainty in Canada could leave the growth stocks, which depend on economic growth, vulnerable to uncertainty. These events will impact the interest rate decisions of the central banks.

All these macro events could have a positive or negative impact on household spending. Now is the time to rebalance your portfolio.

Three stocks to sell the rally

Enbridge (TSX: ENB) is trading near its multi-year high above $64 for many reasons. It has added three U.S. gas utilities to its portfolio, and winter season demand has pushed this range-bound stock to its high. Although it is a good long-term stock, a price above $60 is unsustainable. You could consider selling a small portion of your Enbridge shares, which you might have bought at an average price of around $50, to take advantage of the momentum rally. You can buy them when the price falls below $50 in mid-2025.

Similarly, you could consider selling Shopify stock, trading at its seasonal peak of above $157. This level is unsustainable, and the stock could fall in February if the central bank decides to slow interest rate cuts.

Air Canada is another seasonal stock trading at an unsustainable level of above $22. It is time to sell the rally before the price dips as the holiday season travel ends.

Three stocks to buy the dip

The profits you make from selling the above stocks can be reinvested in stocks trading near their lows and have the potential to outperform in uncertainty.

Hive stock

Hive Digital Technologies (TSXV:HIVE) will benefit from a rally in Bitcoin price as it has a strong Bitcoin inventory. The market expects crypto to gain recognition under the Trump presidency and Elon Musk’s influence on policy decisions. A reduction in corporate taxes and immigration could promote domestic jobs and increase consumer’s buying power. More money in the market could drive investments in Bitcoin.

Hive is a range-bound stock trading between $4-$8. The stock has just begun to gather momentum. It could break its $8 upper range and make a new high amid optimism around crypto. A strong sign of Bitcoin acceptance and optimism is the launch of BlackRock’s iShares Bitcoin Trust.

Barrick Gold

Barrick Gold (TSX: ABX) stock has dipped 20% in the last quarter of 2024 as falling interest rates increased liquidity. The mining company’s stock is a good way to take advantage of the gold price fluctuation as its stock price fluctuates more than the gold price. The import tariffs and the risk of another trade war under the Donald Trump presidency could encourage central banks worldwide to increase their gold reserves.

Now is a good time to buy gold stocks at the dip and take advantage of the geopolitical uncertainty. It may be the best stock to own for the long term, as the mining company is seeing an increase in debt. Hence, invest only a small portion of your portfolio in this stock to make short-term opportunistic gains.

BCE

BCE (TSX: BCE) could be 2025’s turnaround story as it realizes the benefits of restructuring. It will see the impact of lower operating expenses and increased focus on high-margin, high-growth businesses like digital ads, cloud, and network security. Once the business restructuring is complete, the company could focus on reducing its balance sheet debt to reduce interest expenses. This dividend stock could be a growth stock for the coming two years, riding a recovery rally.