For my first official take on investing for 2025, I’d like to say that I largely agree with the view of AMP’s Shane Oliver that while a correction is highly likely this year, I still think we’ll see a positive year for remaining long the share market. That said, I think you’ll need to pivot, take profit in some stocks we all love and have made money from and get exposed to different investments that are bound to benefit from interest rate cuts here in Australia.

On Saturday, I revealed Shane’s view on stocks this year, but it’s timely to remind you what he said in a nutshell:

1. 2025 is likely to see positive returns but after the strong gains of the last two years, it’s likely to be more volatile and constrained, particularly as Trump returns with populist policies. A 15% plus correction is likely along the way.
2. We expect the RBA to cut the cash rate to 3.6%, with the first cut looking like it could be in February, the ASX to return around 7% and balanced super funds to return around 6%. Australian residential property prices are likely to soften further ahead of support from rate cuts.
3. The key things to watch are: interest rates; recession risk; a likely trade war; China; and the Australian consumer.

I’ve been heralding for some time that the top 20 stocks in the ASX that have boomed are doomed to a pullback this year as interest rates fall and fund managers and smart investors pocket profit and go chasing either small- and mid-cap stocks that have been hit by rising interest rates since 2022, or there’ll also be some rushing to defensive/income plays that come as market experts expect good things from bond funds.

I also suspect income funds will become popular, as profit made from growth plays over the past two years is channelled into investments that could temporarily lose capital value but will pump out good income. Vanguard’s High Yield Fund (VHY) and funds like SWTZ (i.e. the Switzer Dividend Growth Fund) as well as others like this are bound to attract investors.

But 2025 should offer good returns from the growth stocks that will enjoy lower interest rates, so below I’ll look at the stocks that FNArena’s top analysts think will be winners. After that I’ll look at the top 20 stocks and by how much the experts think they’ll fall.

Growth winners for 2025

1. Xero (XRO): 17% consensus rise; 6/6 say yes.
2. Megaport (MP1): 29.7% rise; 6/6 say yes.
3. Audinate (AD8): 44.9% rise; 4/4 say yes.
4. Champion Iron (CIA): rise 21.2%; 3/3 say yes.
5. Chalice Mining (CHN): 179.4% rise; 2/2 say yes.
6. CSL (CSL): 22.1% rise; 6/6 say yes.
7. Neuren Pharma (NEU): rise 108%; 2/2 say yes.
8. Tyro (TYR): rise 62.1%; 4/5 say yes.
9. IDP Ed (IEL) rise 39.1%; 4/4 say yes.
10. Paladin Energy (PDN): 35.6% rise; 6/6 say yes.

Now let’s see what the analysts think of some of our top 20 favourites:

1. CBA: down 33.5%; 6/6 say no!
2. Wesfarmers down (WES) 9.4%; 5/6 say no.
3. JB HI-FI (JBH): down 17.8%; 6/7 say no.
4. NAB: down 13.3%; 5/6 say no.
5. Westpac (WBC): down 9.9%; 5/6 say no.

Out of the top 20 stocks, I like BHP and Rio Tinto, and it’s good to see China produce some better-than-expected economic readings last week. The analysts tip a 12.9% rise for BHP, and 6 out of 6 give it the thumbs up, while Rio gets a 7.8% rise with 6 out of 6 supporting the company.

As I’ve said in the past, the expected rate cuts should be good for that EX20 ETF that captures the stocks listed 21 to 200 in the S&P/ASX 200. Of course, many of the growth stocks listed above would be in EX20, but it will be our job over the next 12 months to identify other potential upside stocks not in that top 20 group.

Finally, don’t forget to check out our TV show, where I ask Jun Bei Liu about the 10 growth stocks listed above and Richard Quinn, the MD of Bentham Asset Management to explain why bonds looks set for a great 2025.