Why staying with your investment strategy remains the best approach.
2025 was a volatile year for many share markets, with trade tensions that dominated the first few months leading to some heavy market falls. Over subsequent months, however, most major markets resumed the upwards trend that began in late 2023 and continued right through 2024. By the end of 2025, markets had almost all moved up strongly, including the broad US market (S&P500 index, up 18%), the technology-focused Nasdaq index (up 21%) and most European and Asian markets. The Australian market also rose strongly, rising 10%.
The outlook for the coming year will depend on many factors, although it is notable that most markets have shown little negative effect from geo-political tensions, including the ongoing wars in Ukraine and the Middle East. Instead, the main factor driving markets appears to have been an expectation that inflation in the major economies would continue to be brought under control and that, as a consequence, interest rates would continue to be lowered. This trend appears to be broadly still in place, although recent upticks in headline inflation in the US and, even more so in Australia, could dampen expectations of further rate reductions for the near-term.
With uncertainty about the outlook always present, as always, our advice to investors is to stay well diversified. We recommend that a core part of an overall portfolio be held in our diversified funds (the Fiducian Capital Stable, Balanced, Growth and Ultra Growth Funds). For investors who are happy to add to this core exposure, other asset sector and specialist funds that have greater risk can be used to capture further potential upside, as we continue to see good potential value in many equity sectors around the world. This is especially so as fundamentally we regard the global economy as being reasonably healthy with positive earnings forecasts in many jurisdictions and with further potential for interest rate cuts in many cases.
In conclusion, as we head into the new year, we encourage you to remain focused on your longer-term objectives. Staying with your established investment strategy remains the most reliable path to achieving your financial objectives.