Lessons investors can learn from 2025

Investors would agree that 2025 was a wild ride for markets, and some would say that given the start to the new year, 2026 could prove to be even more volatile.

So, what are the lessons we can learn from the past year to better inform our future decisions?

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Personal financial adviser Warren Ingram makes the point that, if markets are all about sentiment, bad news doesn't actually mean that markets WILL drop. 

"We tend to be so focused on the human stories and the human cost of conflicts like those of the past year in the Middle East and Ukraine, that we often develop a baseline of negativity... believing these conflicts are so horrific that they must be bad for investment markets. Just understand that while markets ARE affected, they immediately start calculating."

South Africa presents another example - Ingram points out that while the government of national unity nearly failed during the budget process amid accompanying concerns that it would talk more than it would actually reform the economy, the average equity unit trust in SA delivered more than 23% over a year and the average balanced fund delivered more than 17%.

Offshore-only is a lousy strategy

Ingram notes that the average global equity fund delivered only 10% for the year, compared to more than 20% for the average JSE fund.

Over 20 years, the average SA balanced fund has delivered 10% per year and the the average global balanced fund 10.1%.

When you measure the JSE in dollars, he says, you earned more than 50% for the year. And people who encouraged investors to allocate all their money to offshore markets were exposed.

The rand strengthened by 14% against the US dollar and 5% against the GBP and AUS Dollar. 

"We should stop thinking about all-or-nothing strategies with investing. Combine a range of investments and markets in your portfolio."

Cash is not king of all castles

Money market funds averaged 7.5% over a year - take off 30% tax, and you earned 5.3%.

Deduct inflation of 3%, and you earned a bit more than just 2%.

By contrast, shares would have delivered more than 15% after tax and inflation, Ingram says.

Volatility is here to stay

We need to accept that political and economic volatility is now a feature of life.

Concomitantly, we should learn to live with volatility in the same way we live with variable weather, Ingram says. That is, don't hope for stability, rather plan for the reality.

"Stable and predictable investment returns are not necessarily a good thing; it could mean your money is stagnating to worthlessness over time. This is what happens with cash investments compared to equity investments."

Scroll up to the audio player to listen to Ingram's detailed advice