2025 Market Review: A Volatile Year That Delivered

As 2025 came to a close, Brad Gotto, Founder and CEO of Fiat Wealth Management, sat down with Tim Holland, Chief Investment Officer at Town Square Orion, to reflect on an unusually volatile year — and what it means for investors heading into 2026.

Strong Results, Despite the Noise

If investors had closed their eyes on January 1 and reopened them at year-end, the results would have looked surprisingly strong.

• Major U.S. equity indices finished up 13% to 22%
  
  
• Bond markets delivered 6% to 7% returns
  
  

And yet, 2025 was filled with fear, uncertainty, and nonstop headlines around tariffs, interest rates, artificial intelligence, and politics. The disconnect between how markets felt and how they actually performed was one of the defining features of the year.

What Drove Markets in 2025

Tim Holland pointed to four primary forces that shaped markets throughout the year:

• The Federal Reserve, which ultimately cut rates three times
  
  
• Corporate earnings, which exceeded expectations across four quarters
  
  
• Tariffs and trade policy, which proved less damaging than feared
  
  
• Artificial intelligence, where strong company fundamentals offset valuation concerns
  
  

While each of these created periods of volatility, all four ended the year on more positive footing.

Volatility Was the Price of Performance

The S&P 500 experienced a nearly 40% swing from its April low to its December high — an extraordinary amount of movement for a broad market index. The April low occurred during peak trade and tariff concerns, yet markets recovered and finished the year with double-digit gains.

The takeaway: volatility is uncomfortable, but it’s often the cost of long-term returns.

Looking Ahead to 2026

While uncertainty remains — particularly around trade policy and interest rates — Tim emphasized that markets ultimately respond to earnings growth and interest rates, not headlines. He expressed a cautiously optimistic outlook for 2026, while reinforcing the importance of diversification and discipline.

Brad echoed that sentiment, reminding investors that long-term investing is not gambling. Over time, markets have rewarded patience, even during years that feel chaotic in real time.

Final Thoughts

2025 reinforced a familiar lesson: short-term emotions drive markets, but long-term data tells the real story.

For investors who stayed focused, diversified, and disciplined, the year ended far better than it felt — a perspective worth carrying into 2026.