The Year 2025

Disciplined investors were rewarded in 2025. Trump's tariffs announcement sent markets down close to 20% by the start of April. Investors who stayed committed then benefitted, as tariffs delays, US trade deals, AI domination, and interest rate cuts sent markets up close to 40%. By year end, equity markets returned 15-20% for the year overall.

Opportunities

As we step into 2026, financial markets are expected to shift into a more discernable landscape, requiring strategic positions which embrace structural growth themes. The sentiment around global growth has moved into more positive territory with expectations that growth will remain above trend for the year, supported by monetary easing and productivity gains from technology.

With Covid-era inflation now abated, central banks are better positioned to lower interest rates further globally, creating a more stable environment for equities and fixed interest investments. Domestically, however, the path of interest rates is less certain, with expectations of the current 2.25% OCR now believed to be the lowest point of the cycle.

Although interest rates have come off from the highs, bonds still offer attractive yields relative to the last decade. As a result, fixed interest investments are expected to continue playing a more active role in diversified portfolios this year.

US equities continue to offer strength, but valuation considerations remain front of mind in investment decisions. Artificial intelligence and healthcare innovation remain dominant themes, feeding structural growth in the US, however, we are now seeing these themes continuing to spread globally. Hence geographic diversification remains important.

Stay Disciplined

Bringing in the New Year provides an excellent chance to revisit our goals and commit again to sticking to the plan.

As the year unfolds, it's easy to be swayed by short-term market noise or headlines. Stick to the plan you've build around your goals. While many of us have enjoyed downtime over the break, this is an especially important time to be aware of the common pitfalls of falling victim to bias and emotions.

Remember, portfolio diversification remains your best defence against uncertainty - we spread investments across asset classes, sectors and regions to ensure risk is managed in any market environment.

What we’re reading: Our 2026 investment outlook: key highlights - JPMorgan PI