As we stride confidently into the second half of 2025, the mantra for savvy investors is clear: it’s time to “re-risk your portfolio.” John Davi, the astute founder and CEO of Astoria Portfolio Advisors, offers a compelling roadmap that goes beyond the usual market clichés. His insights underscore a critical pivot in market dynamics that every investor and advisor should heed.
Let’s unpack why re-risking now isn’t just a catchphrase but a strategic imperative.
The Market’s Remarkable Recovery: A V-Shape Rebound with a Twist
Earlier this year, the S&P 500 was reeling, down about 15% by April 8 amid tariff fears and inflation jitters. Fast forward a few months, and the index has surged to a 6.7% gain year-to-date. This sharp turnaround isn’t just a rebound; it’s a V-shaped recovery powered by renewed optimism around AI advancements, strong corporate earnings, and a weakening U.S. dollar.
Davi highlights a critical point often overlooked: the breadth of earnings revisions has recovered dramatically. This means it’s not just a handful of tech giants driving the rally but a wider swath of companies across various sectors. This breadth signals a healthier, more sustainable market rally, reducing the risk of overconcentration in the so-called “Magnificent 7” tech stocks.
Why the Dollar Matters More Than You Think
Astoria’s analysis reveals that a declining dollar historically acts as a tailwind for global risk assets. This macroeconomic factor often gets lost in the noise but should be front and center in portfolio strategy. A weaker dollar boosts multinational earnings and makes U.S. exports more competitive, which in turn supports sectors like industrials and energy—areas ripe for investment now.
Beyond the Usual Suspects: Diversifying with Equal-Weighted ETFs
Here’s where Davi’s advice becomes actionable and unique: instead of doubling down on mega-cap tech ETFs like SPY or VOO, investors should explore equal-weighted ETFs that democratize exposure across sectors and company sizes. For example, the Invesco S&P 500 Equal Weight Industrials ETF (RSPN) offers a more balanced approach to industrial stocks than the traditional Industrial Select Sector SPDR Fund (XLI).
Why does this matter? Equal-weighted ETFs reduce concentration risk and often capture the growth potential of mid-sized companies that are outpacing the giants in earnings growth. Astoria’s research found over 85 S&P 500 and MidCap 400 companies with earnings growth exceeding 25%—outperforming even Nvidia and Meta. This is a goldmine for investors ready to diversify beyond the tech behemoths.
Spotlight on Real Assets and Infrastructure: The New Growth Engines
Consider the BNY Mellon Global Infrastructure Income ETF (BKGI), which has soared 30% in 2025 alone, dwarfing the S&P 500’s 7% return. With a solid 4.17% distribution yield and a reasonable P/E ratio of 16.2, BKGI offers a compelling mix of income and growth, anchored by utilities and energy giants like Enel and Dominion Energy.
Similarly, the Astoria Real Assets ETF (PPI) has gained 14% this year, with holdings spanning gold, energy, and real estate. These sectors are benefiting from AI-driven infrastructure investments, particularly in data centers and energy efficiency projects, positioning them as defensive yet growth-oriented plays.
Fixed Income: Don’t Overlook High Yield and Corporate Credit
In a market where fixed income yields remain attractive, Davi recommends ETFs like the Schwab High Yield Bond ETF (SCYB) and JPMorgan BetaBuilders USD High Yield Corp Bd ETF (BBHY). These funds offer exposure to high-yield credit, which currently presents value as corporate balance sheets strengthen and default risks remain contained.
What Should Investors and Advisors Do Differently Now?
-
Rebalance with a Focus on Breadth: Move beyond concentrated tech bets and embrace sectors and companies showing robust earnings growth—even if they’re mid-cap or less glamorous.
-
Leverage Equal-Weighted ETFs: These funds can provide diversification and mitigate risks associated with mega-cap dominance, especially in volatile markets.
-
Capitalize on Real Assets and Infrastructure: With inflation concerns lingering, real assets offer a hedge and income generation, supported by secular trends in AI and energy transition.
-
Incorporate High Yield Bonds Selectively: Given the improving credit environment, selective exposure to high yield and corporate bonds can enhance portfolio income without excessive risk.
Looking Ahead: What’s Next?
The market’s resilience amid geopolitical uncertainties and policy shifts suggests that the next six months could see further gains, especially if earnings continue to surprise on the upside. However, investors should remain vigilant about inflation trends and central bank signals, which could alter the risk landscape quickly.
According to a recent CFA Institute survey, over 60% of portfolio managers expect moderate economic growth with controlled inflation through late 2025, reinforcing the case for diversified risk-taking.
Final Thought
Re-risking your portfolio today isn’t about reckless speculation—it’s about strategically positioning for a market that rewards breadth, real assets, and credit quality. Investors who heed this call will not only navigate uncertainties more effectively but also capitalize on the evolving growth engines of tomorrow.
For actionable insights and portfolio strategies that go beyond the headlines, keep tuning into Extreme Investor Network—where data meets decisive action.
Sources:
- CNBC Interviews with John Davi
- FactSet Market Data
- CFA Institute 2025 Market Outlook Survey
Source: Investor John Davi’s picks for 2H of 2025