In our recent coverage, we introduced our curated list titled Starter Stock Portfolio: 12 Safe Stocks to Buy, designed specifically for those venturing into the stock market. This article will explore where Bank of America Corporation (NYSE:BAC) stands in comparison to other beginner-friendly stocks, particularly during this volatile economic period.

The first quarter of 2025 has proven to be tumultuous for the US stock market, which has been characterized by heightened volatility and predominantly negative returns across major indices. This climate of uncertainty has been fueled by various factors including trade tariffs, mixed economic data, and the fluctuating performance of essential technology stocks. Investors have found themselves navigating a rocky landscape, grappling with the implications of these developments on their portfolios.

At the outset of the year, the global stage was shaken by the unveiling of DeepSeek, an innovative Artificial Intelligence (AI) software developed in China. This software has drawn comparisons to its American counterparts, notably ChatGPT, and is regarded as a disruptive force in the tech landscape. The emergence of DeepSeek has triggered a significant sell-off among global investors, with a notable US tech company suffering a staggering loss of $593 million in a single trading day, as reported by Reuters.

In response to these market shockwaves, the US government swiftly enacted policies aimed at bolstering US-listed technology firms while simultaneously attempting to mitigate the influence of DeepSeek on the market. This included the imposition of tariffs on trade with Chinese firms, a move designed to protect domestic interests amid fierce international competition.

The prevailing uncertainty surrounding the US economy has only exacerbated market instability. The Federal Reserve’s recent announcement to maintain interest rates between 4.25% and 4.50% in the near term has stirred further apprehension among investors. Although the banking sector typically represents a robust investment avenue during periods of elevated interest rates, it is not entirely shielded from the adverse effects of this economic climate. Analysts, who initially anticipated a low-interest rate environment for 2025, are now re-evaluating their forecasts in light of potential non-performing loans (NPLs) that may arise from sustained high rates.

In March, these concerns were further amplified when President Trump declared additional global tariffs targeting both Europe and China. This announcement ignited fears within the investment community, leading to retaliatory measures from European nations, who promptly introduced counter-tariffs. Emily Bowersock Hill, CEO and founding partner at Bowersock Capital Partners, which manages an impressive $850 million in assets, critiqued the US's tariff methodology in an email, stating: “So simplistic, and frankly primitive as to leave the market wondering, did its architects ever take Econ 101?”

On April 9, 2025, the US is set to enforce tariffs of 54% on a wide array of Chinese goods. In retaliation, China has announced reciprocal tariffs of 34% on US products, as reported by the official Xinhua News Agency. As a result, the US stock market indices have experienced their most significant decline since the onset of the COVID-19 pandemic, raising alarms about the potential disruption to global supply chains.

Economically, the US appears to be sliding into a state of “continuous stagflation,” which is characterized by persistent inflation accompanied by minimal growth and elevated unemployment rates. The Cboe Volatility Index, known as the VIX, currently stands at 29.68%, significantly higher than its one-year average of 17.6%. In light of these challenging economic conditions, investors are advised to seek out stocks that promise steady or growing revenue, consistent dividend growth, low cyclicality, and strong cash flows, all while maintaining a durable competitive advantage. Consequently, sectors deemed systemically important such as energy, real estate, healthcare, finance, and technology are likely to emerge as favorable options for cautious investors.