Top 5 investment lessons from 2025

We're heading into one of the most rewarding times of the year. (And no, I'm not talking about dividend season.) 

The holiday period is a powerful reminder of the 'why' behind investing. Growing personal wealth lets us enjoy a decent lifestyle - one that we can share with the people who matter in our lives.  

Like many Australians, I'm starting to wind down ahead of a highly anticipated (if potentially slightly exhausting) Christmas shared with my family and ever-growing brood of grandies.  

It makes now the ideal time to look back over 2025 - a year that offered useful lessons for investors, new and experienced alike, to carry into 2026. 

Here are my five key takeaways from 2025.

1. Volatility is something we live with 

If 2025 proved anything, it's that volatility is not a rare occurrence. It is an ongoing part of the investing landscape.  

Think back to April. That was when US President Donald Trump's sweeping 'Liberation Day' tariffs sent global share markets tumbling.  

In a pattern that became familiar through 2025, just days later, Trump announced a pause on tariffs, and sure enough, the market did an about-face and surged upwards.    

Remarkably, by October, the Australian share market hit a record high.  

For all the stock market shenanigans of 2025, Aussie shares have notched up 9% total returns for the year to date to the end of November - a great reward for investors who resisted the urge to panic sell back in April. 

Key takeaway: Don't fear volatility, plan for it. A diversified, long-term portfolio is a proven way to help smooth the bumps and keep you invested through the inevitable market ups and downs. 

2. Fees - not returns - are the only sure thing  

It's amazing how often we sweat the small stuff, like queueing for cheaper fuel in order to save a few bucks, all while overlooking far bigger costs.  

When, for example, was the last time you checked your super fund's fees? Yet even a small difference in fees can make a big difference to your long-term wealth. 

As a guide, Canstar found today's 25-year-old who pays annual super fees of 0.75% could have $92,700 more in super by age 67 than if they were with a fund charging fees of 1.50%.

The reality is that returns are not guaranteed. Fees are set in stone. And in a win for investors, intense competition is helping to drive down fees, especially across exchange-traded funds (ETFs).  

In August, we saw Global X launch its Australia 300 ETF (A300) with a fee of just 0.04%. Even so, there are cheaper ETFs with fees of 0.03%.

This is a plus for investors: lower fees mean more of your money goes to building your wealth. 

Key takeaway: Returns aren't the only thing that compound over time. The impact of fees does too. Take a minute to check the fees you're paying across everything from bank accounts to your home loan, super and investments. You may be surprised how it all adds up.  

3. Cash has its place - but it's not a long term strategy 

You'd think an ongoing cost-of-living crunch would see Australians save less, not more. 

However, that's not the case. 

Households are collectively sitting on deposits worth $1.7 trillion, up from $1.4 trillion in 2023.

Part of this increase is likely due to attractive advertised returns especially on 'bonus savers' that pay high interest if you meet various conditions. 

The trouble is, plenty of account holders don't meet these conditions.  

Reserve Bank data shows advertised rates on savings accounts are around 4%. Actual interest paid by banks is closer to 2.8%.

With inflation currently running at 3.8%, the purchasing power of money sitting in savings accounts is probably going backwards.  

With three rate cuts in 2025, you could be earning less on cash savings than you realise. Time to take a closer look. 

Key takeaway: Cash has its place in a portfolio. It provides stability, emergency funds and a secure parking spot for money earmarked for investing elsewhere. But it's not a growth engine. Use cash strategically, not as a substitute for long-term investing. 

4. Investors often buy in when values are high 

'Buy low, sell high' is the classic recipe for successful investing.  

All too often though, investors do the opposite, piling into an asset just as the hype - and prices - are hitting a high point. 

October saw people queuing to buy bullion as the price of gold hit record highs.  

Bitcoin, too, has had a wild ride - even by Bitcoin standards. The crypto has dropped 18% in the past six months after hitting fresh highs. No doubt, plenty of fingers have been burned.

Key takeaway: Rather than follow the herd to embrace 'the next big thing', decide which investments will help you achieve your goals, map out a path to a diversified portfolio and stick to your game plan.  

5. Patience outperforms headlines 

Looking back, it feels as though 2025 has been filled with dramatic news cycles. 

From rate cut speculation to commodity price spikes, investors can be tempted to make decisions based on short-term events.  

The thing is, every year dishes up its fair share of drama. It's often with the benefit of hindsight that we realise decisions driven by short-term issues weren't such good decisions at all.  

Key takeaway: Building wealth is a long-term journey. It's not hard though it does call for patience, consistency, and the discipline to focus on long-term goals.  

Final thoughts 

2025 offered powerful reminders of several core investing principles: stay diversified, be mindful of fees and maintain a long-term mindset. 

I have no doubt that markets will continue to shift in 2026. We'll face new challenges and new dramas. 

But investors who learn from each year's lessons are well-positioned to grow and protect their wealth in the years ahead. 

I wish you and your family all the best for a safe and merry Christmas. I'll be back in 2026 to share more thoughts on investing.