What did the past year teach us?
Lots.
But if we do not learn from it, we are doomed to repeat it.
Here are some of the most important lessons that 2025 taught us.
1. Stay in your seat
On April 2, 2-25, Donald Trump announced Liberation Day Tariffs.
The S&P500 proceeded to drop by over 12% in a week.
It was a deeply uncertain time.
As we now know, the S&P500 ended up returning about 16% in 2025.
But in April, it was far from a sure thing.
In fact, there was panic everywhere.
Those who stayed in their seat were rewarded.
Those who exited the market failed to capture the incredible rebound.
Despite having such a massive intra-year decline, markets can and do have positive returns often.
The average intra-year drop is 14%, but markets are positive in 32 of 42 years.
Stay in your seat if you wish to capture market returns.
2. Diversify Globally
In 2025, the S&P 500 returned about 16%.
This was handily beat by international developed stocks that returned about 32%.
Emerging markets did the best, returning a stunning 36%.
All of these are high returns.
But if you asked anyone in 2024, nobody would have told you the US would underperform the rest of the world.
Diversification is the only free lunch in investing.
Make sure to take advantage of it.
3. Nobody knows what will happen next
Unfortunately, nobody knows what will happen in 2026.
We have already seen that the US has deposed Nicolas Maduro as the President of Venezuela.
That wasn’t on anybody’s bingo card.
Neither was the liberation day tariffs, nor the walking back of said tariffs.
In the end, all our predictions are little more than guesses.
So don’t believe anyone who tells you that they can tell you where the wind is blowing in 2026.
They could be late, they could be early. But that is the same as being wrong.
Stick to your plan, but don’t be surprised when things go wrong.
Because man may plan, but God laughs.
Here’s wishing all of us the best in 2026.
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