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Warren Buffett will not replace Cathie Wood at ARK Invest; Heard it here first. But there are some other things that are unlikely in 2025 that investors should pay attention to.
While risk is inevitable, the key is figuring out how to minimize it. And that means determining where it would take something big for things to go wrong.
“Diageo cuts dividend”
Diageo (LSE:DGE) faces a double threat: US tariffs and anti-obesity drugs. But I don't see any of these causing the company to reduce its dividend in 2025.
On the issue of fees, I think it's worth noting that a good portion of the company's portfolio – including bullet, royal crownand Smirnoff It is produced in the USA. These would not be affected by import taxes.
When it comes to anti-obesity medications, most users are people who already tend to consume less alcohol anyway. That's why I'm skeptical that this could have a significant impact on demand.
The risks can't be completely ignored, but the discounted share price means I'm looking to buy the stock in 2025. And I think the chances of the dividend doing anything other than increasing in 2025 are extremely remote.
“Rightmove accepts the takeover offer”
Earlier this year, the REA group made an offer to acquire right movement (LSE: RMV). The offer was rejected and I don't think anyone will be successful with a similar proposal in 2025.
There are two reasons for this. The first is that the company is doing well for itself: it is growing strongly and has a strong balance sheet, meaning there is almost no pressure to sell.
The second is that the stock isn't exactly cheap, with a price-to-earnings (P/E) ratio of 27. I won't be buying it at current levels and I don't see anyone paying significantly more than this to acquire the stock. firm flat.
Next year will be an interesting one for Rightmove, with the prospect of increased competition from OnTheMarket a potential threat. But as far as the possibility of an acquisition is concerned, I don't think so.
“Interest rates return to Covid-19 levels”
A return in interest rates to 0.1% would almost certainly trigger a huge rally in stock prices. But unless there is another emergency of the magnitude of the Covid-19 pandemic, I just don't see it.
Even in that situation, I think the Bank of England could be more cautious than last time. The resulting inflation is proving resilient and the last measurement in 2024 revealed that the CPI rose to 2.6%.
Rising costs are not welcome, but higher interest rates might not be bad for investors. This should influence share prices, creating opportunities for higher long-term returns.
Of course, that depends on which stocks investors choose to buy. But companies that can pass on higher costs to customers could make very attractive investments.
I could be wrong…
With investing, uncertainty is inevitable. Dividends are never guaranteed, strange acquisitions happen, and exogenous shocks can cause all kinds of macroeconomic instability.
I could be wrong, but I don't see Diageo cutting its dividend, Rightmove being acquired or interest rates going to zero. I think this is about as likely as Warren Buffett taking over a disruptive innovation fund.
