As we approach the end of the year, the last few days of December provide an opportunity to pause and reflect on 2025.
The year got off to an eventful start with the inauguration of President Donald Trump, one of many significant elections that created political change around the world.
Following uncertainty and drama amid US tariff announcements, markets subjected investors to a month of uncomfortable volatility.
While eventful, US tariffs were only one part of a story. Meanwhile, numerous peace deals have successfully de-escalated lengthy conflicts, and the AI revolution has made great strides in reshaping the way we work.
Overall market returns are expected to be above average
Despite sometimes chaotic market movements (including a sharp decline that saw global equities fall by roughly 19%), overall returns in 2025 are expected to be above average, continuing two strong years of returns investors enjoyed in 2023 and 2024.
March and April were particularly uncomfortable for investors. Bumpy to say the least, periods of market volatility and uncertainty are never pleasant. However, they are a helpful reminder that patience and discipline over the long term is key to investing success.
Those who held their nerve and remained invested throughout have been rewarded for their staying power.
As others look ahead to what 2026 may bring, the events of the past 12 months provide crucial lessons to carry forward into the new year and beyond.
3 valuable investing lessons you can learn from 2025
1. Overvalued markets still have room to grow
Early in the year, many market pundits warned that global markets looked expensive by historical standards. However, markets – made up of a wide variety of great companies and global businesses – continue to deliver returns.
Ultimately, investing is more about selecting strong stocks than timing when you buy or sell shares.
You may be tempted to wait for the optimal time to buy or sell when prices appear to peak. However, this could lead you to miss out on valuable growth – as we’ve seen, markets can remain “expensive” for years and continue to reward patient investors.
Meanwhile, if you attempt to time the market you have to make two correct decisions: first when to get out, and second when to get back in. History has repeatedly shown that this is a game that’s incredibly hard, perhaps impossible, to win.
2. Knowing what’s going to happen won’t help you predict how markets will react
As the tariff announcements proved in early April, information can only help you so far.
Liberation Day – 2 April 2025 – heralded news that many had been anticipating: President Trump intended to introduce a series of tariffs.
In the face of uncertainty, markets – that had been in decline since March – dropped sharply. Then, just five days later, on 8 April, the market reached the bottom and started to recover – despite continued uncertainty and no clearly visible end to the saga that had stirred things up.
Knowing that tariffs were on the way didn’t give investors any advantage. Though the information was readily available, nobody could predict how – or when – markets would react.
This is why Ascenta focuses on planning, not predicting.
3. Planning for the long term is likely to reward you more than betting on short-term predictions
The AI revolution is well underway and we’re already seeing significant changes in the way we work. Looking ahead, it’s hard to imagine all the ways AI integration might change daily life. No one can yet understand how businesses may harness the technology for profitable growth.
How this will all affect the financial markets is also impossible to know.
What we do know is that uncertainty is not a new phenomenon – rather, it’s a permanent state of investing.
As we constantly remind all our clients, investing is a long-term game that shouldn’t be swayed by stories spun by financial media.
Your solid financial plan and investment portfolio – made up of well-diversified stocks – is designed with your appetite for risk and long-term goals front of mind.
So, when things feel most uncertain, you can rest assured that your investments are devised for you, your goals, and your long-term financial future.
We wish you a restful holiday season and a prosperous 2026
2025 has been an eventful year in the markets, serving as a useful reminder that while we can’t predict what might happen next, we can be prepared.
As ever, at Ascenta, we’re here to help you focus on those things you can control: resilient long-term financial plans, patience, and a disciplined approach to investing your wealth.
We wish you a happy and peaceful holiday season and hope you enjoy some much-needed downtime with the people who matter most.
Whatever 2026 may bring, we’ll be here to help you navigate it.
