As we close out 2025, it’s fair to say the year has tested patience for many investors and households.

While markets ultimately delivered positive results, the journey was anything but smooth. Headlines were loud, emotions often ran high, and yet, once again, long-term discipline quietly did its job.

The Quarter in Review: Steady Progress

The final quarter of 2025 saw most global share markets move higher, building on gains from earlier in the year.

International shares were the standout performers, particularly in the United States, where large technology companies continued to benefit from strong enthusiasm around artificial intelligence.

Closer to home, New Zealand and Australian shares lagged global markets, though both still delivered positive outcomes over the year.

Fixed interest returns were also modestly positive, supported by the welcome decline in global interest rates from their post-Covid peaks.

In short: nothing spectacular, nothing disastrous, just steady progress.

Decoding the Headlines: Signal vs. Noise

You may have noticed that political and geopolitical events dominated the news cycle throughout the quarter.

From US politics to unexpected international developments, the commentary often felt unsettling.

One example late in the year was heightened media coverage around Venezuela and US involvement there.

While confronting on a human level, events like these typically have little to no material impact on globally diversified investment portfolios.

This is an important reminder: What feels urgent in the news is rarely important for long-term investors.

Markets absorb information quickly, adjust prices accordingly, and move on. Reacting emotionally to headlines often does more harm than good.

A word of caution on “hot” investment themes

Artificial intelligence has been a major driver of returns in 2025, particularly in the US share market.

A small group of large technology companies now makes up a significant portion of global indices.

While AI may well be transformative over time, history reminds us that concentrating too heavily on any single theme is risky.

Many investors will remember the dot-com boom and bust of the early 2000s, where exciting technology stories didn’t always translate into sustainable returns.

At Central Financial Planning, we continue to favour broad diversification, not because it’s exciting, but because it works.

Emerging markets back in the spotlight

An encouraging development this year has been the strong performance of emerging markets, which outperformed developed markets during 2025.

Countries such as India, Korea, Taiwan and parts of Latin America benefited from improving fundamentals and renewed investor interest.

Emerging markets don’t always lead, and they can be volatile. But over long periods, they have played an important role in diversified portfolios.

This quarter reinforced why we don’t ignore them—even when they’re out of favour.

What about New Zealand?

For many New Zealand households, 2025 felt harder than expected.

Economic growth was sluggish, costs stayed high, and confidence remained fragile for much of the year.

The good news is that inflation is now back under control, and the Reserve Bank cut interest rates several times during the year.

These changes take time to filter through, but by late 2025 there were signs that spending and hiring were slowly picking up.

Looking ahead, most forecasts point to a gradual recovery in 2026. It won’t be a straight line, but the foundations are starting to look more stable.

Why we don’t try to predict the future

If the past few years have taught us anything, it’s that forecasting is a dangerous game.

The next shock, be it economic, political, or otherwise, will almost certainly be something nobody is expecting.

Rather than trying to predict the unpredictable, our focus remains on:

• Owning high-quality, liquid investments
• Diversifying widely across asset classes and regions
• Aligning portfolios with each client’s stage of life and tolerance for risk

This approach doesn’t eliminate uncertainty—but it does help manage it.

The takeaway 

As 2025 comes to an end, the key message is a familiar one:

• Progress rarely feels comfortable while it’s happening.
• Markets reward patience, not prediction. While headlines come and go, well-constructed portfolios quietly do their job in the background.

After all, good financial planning isn’t about chasing the best return this year, it’s about giving you confidence, clarity, and peace of mind over many years.

If you have questions about how your portfolio is positioned, or you’d like to revisit your plan as you head into 2026, we’re always happy to talk. 

Brent Wilson – [email protected]

Dewald de Beer – [email protected]

Scott Sinclair – [email protected]  

Deep Dive: This update is based on our full October–December 2025 Economic Commentary. For the complete report, please email us at [email protected].

Recommended Viewing: "Tune Out the Noise"

We highly recommend this documentary film which explores the rationale behind evidence-based investing. It illustrates why market timing and stock picking are generally ineffective compared to a disciplined, long-term approach. Watch on YouTube

Sponsored Content: This article has been submitted by a contributing local expert as part of The Central App’s sponsored advisor programme.