On February 11, Johanna Kyrklund, Chief Investment Officer of Schroders global investment group, stated that as we enter 2025, despite the high valuation of the US stock market, she still maintains a position that positive economic nominal growth and interest rate cuts are favorable for the stock market, as corporate profits are expected to remain robust, and inflation is still heading in the right direction. With major stock indices no longer providing the same diversification benefits as before and political consensus shifts changing the correlations between asset classes, investors need to work harder to build resilient investment portfolios. However, she pointed out two risks that concern her. First, whether rising bond yields will threaten stocks. The 2010s were characterized by tight fiscal policies and a zero interest rate environment, which led to excessive income inequality and support for populist policies, resulting in a new consensus focused on loose fiscal policies, protectionism, and higher interest rates. Loose fiscal policies represent higher borrowing costs. In many regions, an aging population along with other expenditure needs will lead to an increase in debt levels. Ultimately, these factors will limit the potential returns in the investment markets. Government spending helps support the economy, but it may sow the seeds of future stock market problems, as overspending in the system typically only gets addressed during economic downturns. Johanna Kyrklund noted that as long as bond yields do not rise too much, stock valuations can be maintained at current levels. The current yield on US 10-year government bonds is around 4.8%, and stock valuations relative to bonds have already entered riskier territory. Rising bond yields may attract outflows from the stock market and increase corporate borrowing costs. Like most market commentators, she had predicted in the past few years that the US economy would either enter a downturn or recession, but the current forecast is for it to develop positively. This may mean that in the short term, bond yields will receive some relief, especially as the market has already priced in expectations of a rate cut in the US in 2025. However, high bond yields are a risk for investors to pay attention to in 2025. The second challenge is the concentration of market capitalization-weighted indices. The strong profit growth brought in by large tech stocks during this period is different from the "dot-com bubble" of 1999/2000. At that time, valuations were unsupported and unexplained, but now the profits of many large US tech companies can support their valuations. However, given the dominance of these companies in major indices, any misstep by one company poses a risk to overall investment market returns. In fact, the concentration of stock market indices now far exceeds that of the late 1990s. From a portfolio perspective, maintaining a high position in a few stocks does not seem wise. More importantly, the driving forces behind the "Big Seven" stocks in the US vary, and viewing them as a collective underestimates the differences in business drivers of individual companies. Given the concentration of the stock market, now is not the time to make big bets. The US shares these risks with other markets. The concentration in European and Japanese stock markets is equally high. Investors who rely on past winners to drive performance have begun to miss opportunities. Since the summer of 2024, the development path of investments and stock markets has become more interesting, with different sectors recording different performances at different times.