The biggest talking point among investors for most of last year was the potential of artificial intelligence and hopes it would make huge profits for the major US tech companies developing it. Their prices rose strongly. However, US shares underperformed those in many other countries in 2025.

International shares earned 12.5 per cent on average last year. The Dow Jones Index of US shares returned a sound 13 per cent. However markets in Britain, Germany, Japan, Hong Kong and China earned 17 to 21 per cent, all outperforming the Dow.

If the major US technology companies hadn’t done so well due to the potential of AI, the returns from the rest of the US market for 2025 would have been modest. So, according to share market data, President Trump’s policies are not helping the US economy and financial markets.  

Most super fund members and retirees once again enjoyed sound returns in 2025. Typical diversified portfolios with around seventy per cent in growth assets including shares, property and infrastructure, earned 10.6 per cent for the year according to Lonsec Research.

That means the typical default super fund should have earned over 9.5 per cent in 2025 after paying earnings tax. It was the third consecutive strong year with the three-year average 12.6 per cent. The ten-year average is 8.3 per cent per annum.

Even conservative investors who kept more than two-thirds of their money in fixed interest areas with less than one-third in growth assets averaged 6.3 per cent last year, comparing well with bank deposits at 4 to 5 per cent.

Australian shares weren’t far behind international shares, closer than in the last few years. Our market did well until November, then saw a sharp setback, before finishing on the rise to be 10.5 per cent ahead including dividends.

Interestingly, our biggest companies underperformed. ASX investors judged them to be fully priced and sought better value among small companies.

The largest 50 companies returned only 7.6 per cent while the Small Ordinaries Index earned 25 per cent. This unpredictability is good reason to diversify and not just hold shares in a few major companies.  

Mining stocks were the standout performers with 36.2 per cent return for the year. Banks and financial companies produced 12.0 per cent while healthcare and IT businesses suffered serious losses.

Property funds and businesses traded on the share market produced a sound 9.2 per cent while unlisted property provided only 2.7 per cent. Overseas market listed property finished up 7.5 per cent and infrastructure returned 11.4 per cent. Now for 2026.