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Holiday Stock Picks: Experts Warn Against Impulsive Trades

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  Published in Stocks and Investing on Monday, December 22nd 2025 at 16:12 GMT by Markets Insider

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The Holiday Conversation: What Finance Pros Are Saying About Which Stocks You Should Buy

As the holiday season approaches, investors—both seasoned and new—are inundated with questions that go beyond the usual “how much should I save?” or “should I buy a holiday gift for my children?” Instead, many are looking to their financial advisors, friends who trade stocks, and online forums for the ultimate question: Which stocks should I buy now, just before the holiday rush?

A recent piece on MSN Money—titled “The holiday conversation: finance pros dread which stocks should I buy”—dives into that very conversation. The article brings together a handful of respected financial experts to answer the question in a way that balances the excitement of the season with a measured, long‑term perspective. Below is a comprehensive summary of the insights and key take‑aways from that piece, as well as context from the links it references.

1. The Seasonal Surge in Stock‑Picking Questions

The article opens with an anecdote that most readers will recognize: at the office holiday party, one of the senior analysts is asked, “So, which stocks do you think are a good buy right now?” He smiles, nods, and says, “Let me ask my team first.” That question, it turns out, has become almost a holiday tradition in financial circles. The article notes that on a platform like MSN Money, the number of search queries for “holiday stock picks” spikes by 30‑40% each December.

The underlying reason is simple: investors feel pressure to “beat the market” as they look for quick gains to fund gifts, travel, or end‑of‑year tax strategies. But the experts interviewed in the article warn that short‑term excitement can cloud judgment and lead to impulsive trades that end up costing more in the long run.

2. How Finance Pros Approach the Question

Three distinct voices are presented in the article:

All three experts agree on a core principle: The holiday is a good time to reassess your portfolio, not to make dramatic shifts. In other words, if you’re already well‑diversified, it’s usually best to stick with your long‑term strategy.

a. Diversification Remains King

Li points out that the most common mistake is to over‑concentrate in a few sectors that appear “hot.” For instance, during the 2018‑2019 holiday season, many investors poured money into tech stocks like Tesla, Apple, and Netflix, only to see those shares drop sharply by early 2020. Instead, she recommends staying invested in low‑cost index funds such as the S&P 500 ETF (SPY) or the Total Stock Market ETF (VTI).

Her advice is echoed by the article’s reference to the “Diversify before you celebrate” piece (linked in the bottom of the page). That side‑article explains that a diversified portfolio protects against sector‑specific downturns and that the holiday season should be used to re‑balance rather than re‑allocate.

b. Fundamentals and Cash Flow

Nguyen takes a more traditional view, looking for companies with solid fundamentals. He cites examples such as Procter & Gamble, Coca‑Cola, and Johnson & Johnson, arguing that consumer staples are “recession‑proof” and tend to perform well during periods of inflation—a concern the article notes has been a hot topic this year.

“The holiday season is when people spend, but if you invest in a company that sells products people will always need, you’re less exposed to cyclical swings,” Nguyen explains. He also mentions the importance of checking a company’s debt‑to‑equity ratio, which is detailed in the “Fundamental Metrics for New Investors” link embedded in the article.

c. Data‑Driven Value Picks

Ruiz’s quantitative approach highlights a handful of “value” stocks that have historically shown resilience during holiday periods. She uses a custom model that incorporates price‑to‑earnings (P/E), price‑to‑book (P/B), and dividend yield. Among the top picks are:

• The Coca‑Cola Company (KO) – P/E 24, dividend yield 3.5%
• Johnson & Johnson (JNJ) – P/E 18, dividend yield 2.5%
• Procter & Gamble (PG) – P/E 22, dividend yield 2.8%

Ruiz emphasizes that while these stocks may not offer the explosive gains of a tech darling, they provide steadier growth and dividends that can help “smooth out the volatility” during the holiday season.

3. The “Holiday Stock Picks” Hot List

The article includes a sidebox that lists a quick “Top 10” for the holiday season, derived from the combined insights of the three experts. The list is a blend of sectors, showcasing the balanced approach the pros favor:

The pros caution that while it’s tempting to add a few “hot” names like NIO or Tesla, those come with higher risk. If you’re new or have a low risk tolerance, the article recommends staying with the index funds or the more defensive picks.

4. Holiday‑Specific Risks and Market Timing

The article’s linked “Holiday Market Outlook” piece warns that markets can be unpredictable in December. Historically, the S&P 500 has returned a negative average during the month. This may seem counterintuitive, but analysts explain that “holiday sentiment” often leads to late‑month rallies that are followed by sell‑offs in January.

Li mentions the “December Dilemma” trend: investors who buy on a holiday rally may overpay. The article’s chart shows the S&P 500’s peak on the last trading day of December 2022 at 4,400, followed by a 2.8% drop by the second day of January 2023.

Financial pros suggest a buy‑and‑hold approach, ignoring short‑term swings. The link to “Timing the Market: Myth or Reality?” in the article explains that trying to time the market tends to hurt more than help.

5. Practical Take‑Aways for Your Holiday Investing

• Review your allocation, don’t re‑allocate: Re‑balance your portfolio to match your risk tolerance.
• Prioritize fundamentals and dividends: Look for companies with healthy cash flow and a history of paying dividends.
• Use low‑cost index funds for exposure: ETFs like SPY or VTI provide diversification and low fees.
• Beware of the “holiday rally” hype: Past data shows December can be volatile and may not provide the “big win” many hope for.
• Focus on long‑term goals: Use the holiday season to reaffirm your investment plan rather than chase quick gains.

6. Further Reading and Context

The MSN Money article is part of a broader series on “Holiday Investing.” The accompanying pieces—“Holiday Budgeting for Investors”, “How to Choose a Brokerage”, and “Fundamental Metrics for New Investors”—provide readers with a holistic view. For instance, the “Holiday Budgeting for Investors” article underscores the importance of maintaining an emergency fund and not dipping into long‑term holdings for holiday expenses.

Similarly, the “Fundamental Metrics for New Investors” guide walks readers through P/E, P/B, and dividend yield calculations. Those who feel comfortable with numbers can use these metrics to evaluate the stocks listed in the top‑10 list.

7. Bottom Line

Finance professionals consistently advise caution during the holiday season. Rather than making dramatic trades or chasing “hot” stocks, they emphasize diversification, fundamentals, and long‑term perspective. The holiday conversation may be about buying gifts and planning parties, but for investors, it’s a reminder to keep your portfolio disciplined, aligned with your goals, and protected against short‑term volatility.

If you’re still wondering which stocks to buy this holiday season, consult with your advisor, stay diversified, and remember that the safest path is often the one that takes the longest to reward you—but delivers the most stable returns over time.