The last 12 months have been interesting for investors, with the market experiencing volatility. Read on to discover valuable insights from 2025.
1. Many markets have performed well despite volatility
If you simply read the headlines from 2025, you might think the markets performed poorly. Worries about high inflation, trade tariffs, and sluggish economic growth have dominated the media.
Yet in many cases, the overall trend has been upward.
The FTSE 100 is an index of the 100 largest companies listed on the London Stock Exchange by market capitalisation. On 2 January 2025, the FTSE 100 was at 8,260 points. During 2025, there were dips, but on 21 November 2025, it stood at 9,539 points.
It’s impossible to guarantee market performance. However, when you look at long-term trends, markets have trended upwards. Even after experiencing sharp dips, markets have typically recovered when you analyse market performance over several years.
While investors might worry about short-term dips, 2025 suggests focusing on the long-term can be reassuring.
2. Investors could benefit from tuning out the noise
One of the biggest factors influencing short-term market movements in 2025 has been trade tariffs imposed by the US.
Indeed, the FTSE 100 reveals several steep falls in April 2025 that coincide with announcements from US President Donald Trump about tariffs. Fears about the effect these tariffs might have on businesses around the world led to markets dropping.
However, as the overall trend of the FTSE 100 emphasises, the initial strong reaction was followed by a market bounce back as fears eased.
Investors who held their nerve through these downturns may have benefited from the subsequent recovery. By contrast, investors who panicked and sold their holdings might have suffered losses.
Tuning out the noise and focusing on your objectives and financial circumstances might deliver a stronger long-term performance.
3. The markets are impossible to consistently and accurately predict
If you made predictions about the markets at the start of the year, how accurate were your guesses?
So many factors affect market movements that it’s impossible to consistently and accurately predict what will happen. Even seasoned professional investors with a trove of resources at their fingertips get it wrong at times.
If you can’t foresee the exact market peaks and troughs throughout the year, it’s impossible to time the market. As a result, you may miss out on potential gains.
Rather than timing the market, investing in assets that align with your goals and holding them over the long term could yield better results.
4. Avoid following trends that don’t align with your investment strategy
2025 has seen a huge popularity boost for AI. More companies are adopting AI into their operations, and people are increasingly using it in their daily lives.
This led the value of some AI companies to soar, and towards the end of the year, fears of a market bubble emerged. According to the Guardian (18 November 2025), Sundar Pichai, CEO of Alphabet (Google’s parent company), said “no company is going to be immune” if the AI bubble bursts.
Those concerns caused the market valuations of AI companies to fall in November 2025.
Investors who only invested in AI stocks because of the hype may have been disappointed and suffered losses. While it can be difficult, avoiding herd behaviour and focusing on your strategy could be valuable.
5. Your investment goals are central to your strategy
As the above points highlight, short-term market volatility isn’t going anywhere. As an investor, sticking to a strategy that reflects your goals could deliver long-term returns.
So, reviewing your goals as you head into 2026 might be beneficial. If your objectives have changed, you may want to update your investment strategy to reflect this.
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Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.
The value of your investments (and any income from them) can go down as well as up, and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.