November proved a volatile month for equity markets, with stocks falling in the early part of the month before recovering towards the end. Despite this, the rebound from the April lows remains notable. A key feature of 2025 has been the impact of a weaker US dollar on returns, with unhedged euro investors (the orange line in the chart below) experiencing materially lower performance than local-currency equity markets.
Source: Data – MSCI, Graphic – Acuvest
November and YTD Numbers
Despite the volatility experienced so far this year, investor outcomes have been more resilient than many expected, as evidenced by the year-to-date returns in the table below.
Recap on 2025
2025 so far has been a year of strong markets set against an increasingly uncomfortable backdrop. The year began with Donald Trump commencing his second term as US President—an event markets initially absorbed calmly but which quickly became more consequential as policy direction (especially tariffs) came into focus. Global equities delivered robust gains in local currency terms, but a weaker US dollar meant euro-based investors experienced far more modest returns.
Politics, policy and geopolitics were ever-present. The re-introduction of tariffs, the declaration of “Liberation Day,” unconventional diplomacy and a renewed push for deregulation added to geopolitical fragmentation and increased uncertainty around global trade, inflation and interest-rate trajectories. Progress towards a resolution in Ukraine remained elusive, while conditions in the Middle East showed tentative improvement, with more constructive developments on the Israel–Gaza front helping to reduce tail-risk concerns.
The ECB had cut interest rates to 2% by June and is expected to hold there, with its final meeting of the year later this week. The US Federal Reserve began cutting rates in 2024, remained on hold through much of 2025, and has now delivered three rate cuts since September. However, with US inflation still running above the Fed’s 2% target, the scope for further easing may be limited—even as growth cools.
Following the sharp rise in interest-rate curves in 2022, bonds have quietly resumed their role within diversified portfolios, albeit with intermittent bouts of volatility.
Gold emerged as a clear standout, extending a powerful run as central-bank buying, political risk and rising debt concerns reinforced its role as a strategic store of value rather than a short-term trade. For euro investors, currency moved centre stage: double-digit euro strength versus the US dollar turned very strong US equity performance into single-digit home-currency gains, forcing a more explicit conversation around hedging and conscious US dollar exposure.
Thematically, artificial intelligence, the energy transition, deglobalisation, deregulation, geopolitical realignment and tokenisation/DeFi have all been significant themes touched on in our Markets in 1 Minutes during the year.
A Quick look ahead to 2026
It is that time of year when investment banks and asset managers roll out their “crystal balls” for 2026. Below is a concise summary of the key themes emerging from these outlooks.
Key issues markets will be watching:
- A new Federal Reserve Chair in 2026, appointed in a more politicised environment, keeping rate expectations, central-bank independence and market confidence in focus.
- US midterm elections, adding policy and regulatory uncertainty—particularly around tax, trade and the future path of fiscal spending.
- Artificial intelligence entering a “show me” phase, with investors demanding evidence that heavy capital expenditure is translating into sustainable earnings and cash flows.
- Sticky inflation risks, increasing the likelihood that “higher for longer” real rates begin to bite, with pressure in parts of the bond market and potentially a weaker US dollar.
- Geopolitics, in particular:
- whether progress can be made towards peace between Ukraine and Russia; and
- whether anti-Europe sentiment from the current US administration is sufficient to spur Europe into action, including implementation of key Draghi report recommendations.
Taken together—the new Fed chair, US midterms, persistent fiscal questions and a maturing AI theme—a consistent picture emerges: volatility is now a feature, not a bug.
The consensus portfolio message for 2026:
- Maintain a pro-equity stance, focused on quality and diversified by region and sector.
- Use fixed income for income and shock absorption, being deliberate on duration and blending government bonds, investment-grade credit and selected higher-yield segments.
- Treat private markets, infrastructure and real assets as “plus” allocations to traditional portfolios, particularly for HNW investors with longer time horizons.
Bottom line:
2026 is unlikely to be a smooth year. However, for long-term investors with a plan and patience, it offers opportunity rather than a reason to stand aside.
Inflation Lower But Still a Potential Issue for 2026
The graph below clearly shows that while inflation has fallen from its late-2022 peak, the recent upward trend in both the US and Ireland is notable.
So – What Should Investors Do?
Staying the Course in a Noisy World
Markets continue to move through shifting headlines and policy surprises, but for long-term investors, the playbook remains familiar: stay patient, stay diversified, and stay focused on the bigger picture.
Our key messages:
- Stay Invested: Markets move quickly, and missing even a few strong days can make a big difference to long-term returns.
- Trust Your Plan: A well-diversified portfolio is designed to navigate periods like this. If your goals haven’t changed, your investment approach shouldn’t either.
- Look for Opportunity: Periods of volatility often create entry points. For disciplined investors, uncertainty can be an ally, not an obstacle.
The Bottom Line:
Long-term success is driven by confidence, not reaction. Staying the course with a robust plan—and good advice—remains the most effective way forward.
John Tuohy is Chief Executive of Acuvest, an Irish-owned, independent advisory firm specialising in wealth management, pensions, and investment advisory services for individuals, companies, pension schemes, charities, and institutions. John is a Chartered Financial Analyst (CFA) and a Fellow of the Chartered Association of Certified Accountants.
