Our team’s top investing lessons from 2025
Looking back on a year in markets.
The end of the year brings a natural moment for reflection.
Even for seasoned investors, the markets have a way of humbling and surprising us, underscoring the fact investing is a lifelong journey of learning.
Below are the lessons that myself and my colleagues took from this past year.
Shani Jayamanne
Director, Investment Specialist
I’ve been travelling a lot more for work to meet a lot of readers and listeners. It has been an enriching experience understanding how people invest, but more importantly why people invest. Typically, these investing forums or presentations focus on investments, while ours is not as focused on securities. After the session, each conversation typically starts with the investments that have worked for them. We have extremely engaged investors who tend to prefer investing in direct equities. They enjoy the process of investing and discussing their philosophies and approaches. Then, I often hear about the purpose of the approach. To have a comfortable retirement. To leave something that will give their grandkids a leg up. Providing a comfortable retirement with best-in-class care for chronic illnesses.
A lot of the work that we do focuses around building the right structures around your investing to provide you with the best chance of success. It is refining the process of investing, with less focus on picking the investments. Speaking to new and familiar friends across the country about their journeys has strengthened my resolve that yes – investments are necessary and they are a lot more fun to talk about. But we’re all just trying to improve the chances of achieving our end goal, and structure is key.
I’m thankful for a year of interacting with investors who have been a pleasure to write and speak to.
Mark LaMonica
Director of Personal Finance
I was terrified of public speaking when I was younger. My technique to deal with my anxiety was picturing what I would be doing later that night. I would imagine myself sitting on the couch and tell myself that no matter what happened during my presentation the result would be the same – I would be sitting and watching TV.
The point of this exercise was to put my presentation in perspective. I knew that if I could calm myself down the presentation had a better chance of going well. This wasn’t some magical technique that turned me into the world’s best speaker. But it prevented me from running away and hiding under my bed. - that was good enough for me.
Investors would be served by using a similar technique. Most years investors are collectively spooked at some point. Most of the time it turns out to be nothing and soon investors forget what they were worried about in the first place. Picturing where you want to end up can add some perspective and prevent you from doing something counterproductive to your long-term goals.
This year investors got spooked in April and the S&P 500 fell 19%. As we approach the end of the year the S&P 500 is up more than 16.50%. You likely remember that it was Trump’s tariff announcement that caused the drop in April. But do you remember why the S&P 500 dropped 10% in 2023 before recovering for a 24% gain for the year? Do you remember the cause of the 11% drawdown in 2016 before the year ended with the market up 10%?
The following chart shows the largest drawdown and end of year return for the S&P 500 for the last decade. Some years were good and some years were bad. Overall the market returned 13.20% annually over 10 years.
Define your goal and picture yourself when you achieve it – that can help you get through the inevitable rough patches. It may not make you the world’s best investor but it might prevent you from figuratively hiding under your bed.
Simonelle Mody
Associate Investment Specialist
A year at Morningstar has ticked over, giving me the chance to pause and reflect. What struck me most is how investing is never static. It’s a constant journey of discipline, discovery and sometimes the odd slip up. It’s certainly been a year of lessons.
Having dabbled in building a portfolio of shares and finding it rather unsuccessful and time consuming, I developed a new found allegiance to ETFs. Against my better judgement I decided to step outside of this strategy earlier this year with a satellite allocation to a particularly controversial ASX player. The short story is that it hasn’t gone as planned.
My takeaway here is twofold. First, I’ve realised that even great companies can be undermined by governance concerns. Focusing purely on growth prospects is an overly tunnel visioned approach. And second, the strength of a strategy is in consistency. If I hadn’t invested in this company, my portfolio would likely be in a better position today. But investing with a long term horizon means we don’t pay excessive attention to short-term volatility and drawdowns (unless the fundamentals have changed).
Alternatively, if I had stuck to my portfolio comprised exclusively of individual picks, there’s a good chance I’d have underperformed the broader market this year. The key action that should underscore every investment decision is to revisit your original strategy and examine why you created it.
Ultimately, I don’t think I made an inherently poor investment decision. I still have strong conviction in the business. But anytime you intentionally deviate from your investment strategy is something to be reflected upon.
You can find Simonelle’s latest articles for Morningstar here.
Tyger Fitzpatrick
Associate Investment Specialist
Although I started this position in November, my background in financial advice kept me active in the market through 2025.
The biggest takeaway from this year was learning to filter through the noise of the media about markets. Learning to decipher what the key information is and using this to form your own opinion is what will differentiate you as an investor.
Headlines in the media tend to overwhelm investors into irrational decisions, which I know from personal experience. The key is persistence. Investing is like playing a sport, it takes a lot of practise and you are going to have plenty of stuff ups along the way. But overtime, your own process will become more defined and lessons from the past will only make you more informed.
Looking into next year, I am aiming to invest more into income producing assets. At 25, I have always favoured investing in growth over defensive industries. However, I have since learned that investing in income early on can set you up through the power of compounding. This is something I’ll look to build going into the new year.
Tyger is the newest addition to our editorial team. He joins Morningstar after spending time in the stockbroking industry.
You can find Tyger’s latest articles for Morningstar here.
Invest Your Way
For the past five years, Mark and Shani have released a weekly podcast and written on morningstar.com.au to arm you with the tools to invest successfully. They’ve always strived to provide independent, thoughtful analysis, backed by the work of hundreds of researchers and professionals at Morningstar.
They’ve shared their journeys with you, and you’ve shared back. They’ve listened to what you’re after and created a companion for your investing journey – Invest Your Way.
Invest Your Way is a book that focuses on the investor, instead of the investments. It is a guide to successful investing, with actionable insights and practical applications.
If anyone would like to support this project you can buy the book at the below links. It is also available in Kindle and Audiobook versions. Thanks in advance!
