A Review of 2025 – Another Year When Patience was Rewarded

As we step into Decembe and reflect back, 2025 has already given investors plenty to reflect on.

The year opened with President Trump’s inauguration, rounding off an election cycle that reshaped political landscapes around the world. What followed was a stormy spell of headlines, dominated by US tariff drama and a short, sharp burst of market turbulence. 

Meanwhile, long-standing global conflicts have shown early signs of easing, and the AI revolution has continued its relentless march through every sector it touches.

And yet, despite the noise, despite a mid-year drawdown that saw global equities fall by roughly –19%, the year is still on track to deliver above-average returns for equity investors. This would mark the third strong year in a row  –  something few would have predicted back in April when markets felt decidedly uncomfortable.

Many of you shared that the March–April period was unsettling. That’s entirely normal. Declines always feel worse in the moment than they look on a chart a year later. But it’s in those moments and not the calm, easy ones that long-term investing rewards discipline. 

Those who stayed invested have been well compensated.

Markets are already fretting about what 2026 might bring, but before looking ahead, it’s worth capturing the lessons 2025 has reinforced.

1. “Expensive” Markets Don’t Mean “Stagnant” Markets

Plenty of commentators spent January warning that markets were overpriced and due a correction. They may still be right  – at some point. But 2025 has been another reminder that valuations tell us almost nothing about when markets will rise or fall.

Expensive markets can stay expensive for years and continue grinding higher.

Trying to “wait for a better entry point” or trimming exposure because prices feel stretched is effectively trying to time the market – and timing the market requires two perfect decisions: when to get out, and when to get back in. History has never been kind to this strategy.

Investing works because we accept uncertainty, not because we avoid it.

2. Knowing What Will Happen Still Doesn’t Tell You How Markets Will React

April gave us a textbook example.

On 2 April, the much-anticipated “Liberation Day” tariffs were formally announced. The news wasn’t shocking  –  most people expected sweeping tariffs  – but markets still sold off sharply, extending the declines from March.

Then, with uncertainty at its highest and no clarity in sight, markets quietly bottomed on 8 April and began to recover.

Having the “right” information didn’t help anyone. Everyone knew tariffs were coming; nobody knew how markets would digest the news. This is why prediction is an impossible game.

Our role  –  and yours as a long-term investor –  is to focus on planning, not guessing

3. Long-Term Planning Still Beats Short-Term Narratives

The world is undergoing a structural shift driven by AI that’s difficult to wrap our heads around. Predicting what life, work, and the economy will look like in five years is almost impossible.

But uncertainty isn’t new. It’s the normal backdrop for investing.

Markets have navigated wars, recessions, pandemics, bubbles, crashes, and countless technological revolutions. Each time, human ingenuity has pushed forward. AI will likely be no different.

The antidote to uncertainty hasn’t changed:
• a well-designed financial plan
• an appropriate asset allocation
• a margin of safety
• and the discipline to stay invested when things get uncomfortable

This is the long-term game. It’s the only game that works.

Graham McCulley

Investment Director