Investment commentary

9th October 2025
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Stuart Coombe See profile
Each day, month and year brings a fresh wave of predictions about which markets, sectors, or asset classes will outperform. Financial headlines continue to highlight the latest themes – whether it’s the rise of AI-driven companies, the growing adoption of cryptocurrencies, or the apparent resurgence of gold as a safe-haven asset. Despite the persuasive narratives, investors should remain cautious about restructuring their portfolios based solely on these forecasts. As history has shown, economies and markets are inherently unpredictable.
Each year, the leading and lagging sectors shift in surprising ways, defying attempts to consistently identify winners ahead of time. The chart below shows the various stock market sectors and for each year ranks their growth compared to each other. For example, recent years have seen information technology stocks provide stellar performance, averaging 16% a year since 2007. Information tech was the top performing sector in 2019, 2020 and 2023, but in between, in 2022, it was one of the worst performers, falling by 21%. Such volatility highlights the challenges of relying on past trends as a guide for future decisions. Note that a diversified exposure to all these sectors provides investors with a smoother journey through time, and the confidence that one can benefit from the sector that dominates in future.
The graphic above shows the randomness inherent in markets and the risks of chasing yesterday’s winners. As always, investors should focus on diversification and their long-term objectives rather than being swayed by short-term trends.
It’s important to recognise that even professional investors, equipped with vast amounts of data and analysis, rarely succeed in consistently outguessing the market. Recently published results showed that in the 10 years to the middle of 2025, 97% of professional UK-based global fund managers have failed on their promise to deliver above-market returns. This is a damning result[1].
Unforeseen events – geopolitical shocks, policy changes, or sudden shifts in consumer behaviour – are swiftly reflected in stock prices, making it nearly impossible to anticipate every twist and turn.
Ultimately, while it is tempting to adjust investment strategies in response to compelling forecasts or recent performance, a disciplined, long-term approach remains the most prudent path.
[1] S&P Global: SPIVA Europe Mid-Year 2025. GBP-denominated funds, ‘Global Equity’ category. For reference, other categories did not show any material improvement in results (‘Europe Equity’: 88%, ‘UK Equity’: 87%, ‘Emerging Markets’: 88%).