US stocks (^DJI,^GSPC, ^IXIC) are trading near record highs ahead of the new year. How should investors position their portfolios in 2025?

Bokeh Capital Partners founder and chief investment officer Kimberly Forrest joins Seana Smith and Brad Smith on Morning Brief to share her 2025 portfolio repositioning strategy, focusing on semiconductor stocks and small-cap allocation.

"I would look at that super semiconductor space and make some adjustments," Forrest tells Yahoo Finance, explaining, "It feels like semiconductors that are targeted on AI seem very overweight, and you should take a look at that." Names like Nvidia (NVDA), Taiwan Semiconductor Manufacturer Company (TSM), and Broadcom (AVGO) are among some of the top year-to-date gainers in the chip space.

The strategist highlights potential opportunities in small-caps with a market capitalization of at least $1 billion.

"Those mid-size companies are kind of forgotten recently and they're also misunderstood." She adds, "A lot of the lore on Wall Street says that mid-cap companies and small-cap companies mostly serve where they are founded in the US, and I disagree with that. I think a lot of the mid-caps are global companies... and I think those are the ones that you should be on the lookout for."

To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.

This post was written by Naomi Buchanan.