Investing Review 2025: The Boring Strategy Won Again
- Gradragstoriches
- 5 days ago
- 5 min read
Boring Builds Wealth
As we open our doors to 2026, the world looks very different to a year ago. However, for those following the Grad Rags to Riches philosophy, the message remains clear: wealth isn't built by reacting to the headlines of the day, but by buying the whole haystack – Boring Builds Wealth.
Investing over the past few years has been a rollercoaster, from the challenges of 2022 to the strong rebounds in 2023 and 2024, each year brought unique lessons for investors. If 2024 was a victory lap, 2025 was a masterclass in volatility, geopolitical drama, and the ultimate triumph of the boring investor.
As we step into 2026, it’s crucial to reflect on what happened in the past years to better navigate the future. To understand why 2025 ended the way it did, we must first look back at the extraordinary journey we’ve taken over the last three years.
A Look Back: The Lessons of 2022–2024
2022: The Great Reset
2022 was the year of the "no-place-to-hide" market. It was a year defined by the triple threat of soaring inflation, rising interest rates, and the geopolitical shock of the war in Ukraine. All major indexes experienced notable declines (The S&P 500 suffered a 20% fall), reminding investors that markets can turn quickly, and for the first time in decades, both stocks and bonds crashed together.
The Lesson: 2022 taught us that "risk-free" doesn't exist in the short term, but it also reminded us that market downturns are simply "equity on sale". Those who stayed the course and continued their monthly contributions were buying at the bottom and making profits despite the downturn, as illustrated by Conor’s journey.
2023: The Recovery That No One Predicted
Heading into 2023, the consensus was grim. Most analysts predicted a global recession. Instead, we saw the "Everything Rally". Led by the tech giants like Nvidia and Microsoft, markets surged, and the tech-heavy NASDAQ 100, which had plummeted 33% in 2022, bounced back by a staggering 55%.
The Lesson: 2023 was a masterclass in why you shouldn't try to time the market. If you had listened to the "bad news gurus" and sat in cash, you would have missed one of the greatest recovery years in history.
2024: It Was a Very Good Year
If 2023 was the recovery, 2024 was the victory lap. It was a year where everything was at an all-time high, from the S&P 500 up 25%, to Gold and even UK property. Inflation began to normalise, and while the cost of living remained a reality for many, the asset-rich saw their wealth compound at an incredible rate. It felt easy, but as highlighted by Gary Stevenson, the "K-shaped" economy was widening the gap between those who owned assets and those who didn't:
"And yet, despite the fact that everything has kind of normalised, living standards for ordinary people are still significantly worse". (Gary Stevenson 2023)
The Lesson: 2024 proved that a resilient economy can support a bull market even when interest rates remain higher than we were used to in the 2010s.
2025: The Year of MAGA
There is no doubt that America, under the new presidency of Donald Trump, has had a major influence in every sphere of economic and political life across the globe.
Early 2025 was defined by Liberation Day (April 8th), when sweeping tariffs were announced, and the S&P 500 nearly entered a bear market, dropping almost 20% in a matter of weeks.
The "Taco" Trade (Trump Always Chickens Out): Markets initially panicked over trade wars, but investors learned to look past aggressive political rhetoric. Those who didn't sell during the April dip were rewarded by a speedy recovery and year-end rally. But, for the first time in a decade, global markets led by the UK outperformed the S&P 500. Diversification across regions was the 'secret sauce' for 2025.
Despite all the political and economic noise, boring index investing as prescribed by Grad Rags to Riches provided excellent profit returns in 2025:
Key Themes for 2025:
The FTSE 10,000 Milestone: The biggest headline of the year-end was the FTSE 100 finally crossing the 10,000-point mark for the first time in history. While the US markets faced a tariff-induced rollercoaster, the UK’s heavy weighting in old economy sectors - banks, miners, and defence paid off handsomely. The Vanguard FTSE 100 fund finished the year up an amazing 26%!
Sticky inflation, but lowering interest rates: 2025 ended with UK inflation at 3.2%, a far cry from the double-digits of 2022, and we finally saw central banks, including the Bank of England, bring the base rate down to 3.75%, providing a tailwind for both the housing market and corporate growth.
The Persistence of Inequality: The crisis of inequality remains. While markets are high, and the asset owners build wealth, living standards for many continue to feel squeezed. This underlines the importance of being an owner of assets rather than just a consumer.
The Tech Evolution: AI is no longer a buzzword; it is an integrated driver of productivity. Companies leading the charge are those that have moved from "AI potential" to "AI profit."
The Return of the Safe Asset: 2025 was a Golden Year for precious metals. Gold hit multiple all-time highs, but Silver was the silent superstar, returning nearly 150% as central banks diversified away from the dollar.
The 18-Year Property Cycle: We continue to watch the property cycle closely. With a potential peak predicted around 2026/2027, 2026 could be a critical year for property buyers and sellers.
The Lesson: If the last four years have taught us anything, it’s that Time in the Market beats Timing the Market, and Diversification is your shield. Whether it's the UK’s FTSE 100 resilience in 2025 or the U.S S&P 500 dominance in 2024, having a global footprint protects you from regional downturns. The headlines in late 2022 told you to run; the returns in 2023, 24 and 25 rewarded those who stayed invested and ignored the noise.
Looking Ahead to 2026
As we stand here in January 2026, the lesson remains the same as it was in our 2022 review. Markets will always find something to worry about - tariffs, debt sustainability, or tech bubbles. But, as we saw with the FTSE crossing 10,000, the long-term trajectory of productive assets is always up.
The last four years have been a wild ride, but for those who followed the Grad Rags to Riches plan, it has been a very profitable period!
Your Personal Financial Plan should not change just because the calendar does. Stick to these Three Simple Steps to Riches:
Automate your investments (LISA/ISA/Pension).
Use low-cost, diversified global index funds.
Switch off the news and go enjoy life.
The "Magic Box" of compound interest works best when you leave the lid closed. Here's to a prosperous 2025!
