As we stand on the brink of a new year, a critical decision looms for investors: which stocks should be left behind in 2025? The market is poised for a strong start, thanks to the infamous 'January Effect,' but not all stocks will ride this wave. In fact, some may drag your portfolio down. Here’s the eye-opening truth: while the market is expected to thrive, certain stocks are flagged as weak performers, and holding onto them could cost you dearly. But here's where it gets controversial—some of these names might surprise you, and not everyone agrees on whether they deserve to be cut loose. Let’s dive in.
The 'January Effect' is a well-documented phenomenon where the market tends to surge at the beginning of the year. This isn’t just about New Year’s resolutions or holiday bonuses—though those play a role. The real driver? Large fund managers rebalancing their portfolios to meet performance benchmarks. They load up on top performers, often small-cap stocks, which can amplify the effect. But not every January is the same, and this year, the stakes feel higher than ever.
And this is the part most people miss: while the market may rise, not all stocks will share in the gains. That’s why it’s crucial to position your portfolio for success. My Stock Grader system, which analyzes financial data and assigns easy-to-understand letter grades, has identified 10 stocks that could weigh you down in 2026. These stocks have earned ‘D’ or ‘F’ ratings, signaling weakness in both quantitative and fundamental metrics. Here’s the list—take a close look, as some of these companies are household names:
| Symbol | Company Name | Quantitative Grade | Fundamental Grade | Total Grade |
|------------|------------------|------------------------|-----------------------|-----------------|
| CLX | Clorox Company | F | D | F |
| DKNG | DraftKings, Inc. | D | D | D |
| DKS | Dick’s Sporting Goods | D | D | D |
| KMX | CarMax, Inc. | F | D | F |
| LOW | Lowe’s Companies | D | D | D |
| META | Meta Platforms | D | D | D |
| SBUX | Starbucks Corp. | D | D | D |
| SWK | Stanley Black & Decker | D | D | D |
| TGT | Target Corp. | F | D | F |
| UHAL | U-Haul Holding | F | D | F |
Here’s the bold truth: holding onto these stocks could hinder your portfolio’s growth potential. In a market where every stock will fight for its place, companies with strong fundamentals and earnings growth are likely to dominate. So, why settle for underperformers? The final trading days of 2025 are your chance to clean house and refocus on stocks that truly deserve your investment.
But let’s spark some debate: Is it ever wise to hold onto a struggling stock, hoping for a turnaround? Or should investors cut their losses and move on? Share your thoughts in the comments—I’d love to hear your take.
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Sincerely,
Louis Navellier
Editor, Market 360
Disclosure: As of the date of this article, the Editor owns securities in Clorox Company (CLX).
