What 2025 didn't bring

With each year-end come the summaries and potential lessons to reflect on and, as far as possible, inform investors going forward.

While there are things that happened in 2025 as projected, such as the Fed's gradual rate cuts or Trump's trade war (announced during the campaign to some extent), there are also things that didn't happen that were in most people's crystal ball.

The AI “bubble” didn't burst. Not everything that goes up has to come down. Solid earnings growth in the companies leading AI innovation has sustained company values on the stock market. That said, only 2 of the “magnificent 7” outperformed the S&P 500; investors would seem to recognize that they might be close to their fair price.

We didn't have a recession in the U.S. For the last 3 years we've been “sure” a recession would come and in March-April 2025, in the midst of the tariff war, we thought it was now inevitable. However, the U.S. economy proved resilient, achieving better performance than most analysts expected.

The U.S. was not the best global stock market. Despite having a solid economy and an impeccable earnings season at the company level, the U.S. fell behind by more than 15% relative to Europe and Emerging Markets in dollars, both with generally much more fragile numbers.

We don't know what 2026 will bring for the markets, but it's good to remember that not all prophecies come true and, when investing, those mistakes can cost us dearly.

Original publication in Diario La Segunda