Markets rewarded Discipline in 2025: Here’s what that Means for 2026

By Steve Lowrie, CFA

Special to Financial Independence Hub

As we closed out 2025, investors found themselves in the kind of environment we all hope for but rarely experience. Global Equity markets delivered exceptionally strong results. Fixed income did exactly what fixed income is supposed to do: specifically, preserve capital and reduce volatility.

From a long-term planning perspective, this is ideal. Strong returns spread across diversified portfolios create exactly the type of environment disciplined investors are positioned to benefit from.

Periods like this also highlight an important truth about investing. Strong markets reveal whether your philosophy is sound. Weak markets reveal whether you truly believe it.

This is a good time to revisit the principles that carried disciplined investors to a successful 2025.

1. What 2025 Reinforced about Sound Investing

Every year brings events that are impossible to predict. Yet the long-term evidence continues to point in the same direction.

A globally diversified portfolio remains one of the most reliable ways to build and preserve wealth.

Market leadership shifts. This year (2025) both Canadian and International equities outperformed U.S. equities.

Maintaining a rebalancing discipline once again created value by doing the opposite of what you want to do: selling what has recently done really well and buying what has lagged.

None of these outcomes required prediction. All of them required discipline.

Discipline is what keeps investors positioned to benefit when markets move higher, which is exactly what happened in 2025.

2. A Year near All-time Highs: What that means and what it does not mean

At the time of writing, many global stock markets indices are at all-time highs. This often triggers two opposite emotions.

Some investors feel relief that their plan is working. Others feel anxiety that a pullback must be around the corner.

The reality is more straightforward. Markets spend a surprising amount of time at or near all-time highs. That is what you should expect from an asset class with a positive long-term expected return.

New highs do not forecast a crash or pullback. For example, looking back at U.S. stock returns (S&P 500) for the past almost 100 years, the return 3 and 5 years after reaching an all-time was pretty much the same as all other periods. All-time highs simply confirm that staying invested has continued to work.

The right question is not “How long will this last?”
The right question is “Is my portfolio still aligned with my goals?”

If the answer is yes, the appropriate action is usually to stay the course.

3. One Thing that stood out in 2025: The Private Investment Push

Each year, one trend tends to reach a volume that’s hard to ignore. In 2025, that trend was the surge in private investments being marketed to individual investors: private equity, private credit, real estate, liquid alternatives, and farmland structures all positioned as retail-access solutions.

None of this is new. What’s new is the scale and intensity of the sales activity behind it.

This raises a straightforward question: if private investments have historically been most beneficial for large institutions, why the sudden urgency to market them to individual investors?

A few likely factors: individual investors typically accept higher fees than institutions negotiate, private structures need steady capital inflows, and strong historical performance always attracts aggressive sales, or more commonly called “distribution” using industry jargon.

Private investments aren’t inherently problematic. They can serve a purpose for the right investor under the right conditions.

However, the current surge appears driven more by sales momentum than investor need, which is usually a signal to proceed with caution.

4. What Investors should do with this Information

Experience suggests a few simple guidelines:

1. Remain committed to evidence-based investing. Public markets are transparent, liquid, competitively priced and well regulated. Private markets are not.
2. Focus on incentives. When someone is working very hard to sell you something, the key question is not “Is this a good investment?” but “Why do they want to sell it to me?”
3. Remember that smart diversification does not require complexity. Complex, exotic investments sound both beneficial and exciting but come with hidden risks.
4. Anchor decisions to your financial plan rather than to whatever investment theme is currently gaining attention.

5. Looking Ahead to 2026

This is the point where investors often expect a prediction about the year ahead. The reality is that nobody knows so the most honest and useful guidance remains the same.

As we have emphasized in the past, short-term market performance, whether it be very positive like in 2025 or very negative a few years ago like in 2022, should not influence your long-term strategy. With that in mind, here are a few core beliefs that continue to shape our approach:

• We are long-term, goal focused, and plan driven investors.
• Neither the economy or markets can be consistently forecast or timed.
• We do not react to short-term economic or market events. As long as your financial goals remain unchanged, so will our plan to achieve them.

Carrying 2025’s Momentum Forward: Investment Principles for 2026

2025 was a year in which disciplined investors were rewarded. Strong returns across major asset classes reaffirmed the value of sticking to a long-term, evidence-based strategy.

Planning will always be more powerful than prediction. Structure will always be more reliable than speculation. And staying the course will always offer a higher likelihood of success than chasing whatever is popular at the moment.

As we enter 2026, my focus remains unchanged: to help you:

• stay aligned with your goals,
• remain disciplined through all market environments, and
• make decisions rooted in evidence rather than excitement.

By staying anchored to these principles, you remain positioned for long-term success regardless of what 2026 brings.