This Week in Review | 2025 Market Recap, Silver Prices

Transcript

Hello, and welcome to This Week in Review. This weekly segment is designed to highlight a few important developments you may have missed this week, what they may mean for markets, and most importantly, the potential impact for investors. To stay up-to-date with our latest market insights, subscribe to our YouTube channel or visit fisherinvestments.com. Now, let's review what happened during this holiday-shortened week. First, a recap of how markets did in 2025. In early 2025, investor expectations varied by region, with median professional forecasters expecting slightly above-average returns in the US, but only low single-digit returns in Europe. At Fisher Investments, we expected another good-to-great year for global stocks, with non-US stocks leading the way, which is exactly how it played out. Now, that's not to say 2025 was all smooth sailing for equity investors. Global stocks did start the year off strongly, rising nicely in January and early February. But then tariff fears sparked a correction—a drop between 10 and 20 percent— which lasted from late February through April. Many professional forecasters lowered their outlooks when the correction hit, but we felt tariff fears were likely overblown. Soon, stocks confirmed what we suspected with a sharp "v-shaped" recovery. By early June, global stocks were back at all-time highs. And while markets saw another slight dip in the fall, a late-year rally brought global stocks' total returns to 21.1 percent in 2025, finishing the year near all-time highs. As we anticipated, stocks in Europe and other developed markets were at the front of the pack in 2025. US stocks continued their fine performance, but gave up the dominant position they had held for the past several years. To us, this non-US outperformance is more evidence that big US Tech and Tech-like stocks aren't the only fuel propelling this bull market. Now, a third consecutive year of global returns near or above 20 percent might have some wondering if the market has come "too far, too fast," considering long-term annualized stock market returns are closer to 10 percent. But stocks' long-term average return incorporates both bull and bear markets. When looking just at bulls, the average annualized return is 23 percent, about in line with returns we've seen the last few years. So, what lessons can investors take away from 2025? There are certainly plenty, and Ken Fisher shared some of his takeaways in a recent video. But one important lesson worth highlighting here is that while corrections can be difficult to endure, markets typically bounce back with strong, sharp recoveries. As we begin 2026, staying disciplined in the face of volatility like we experienced in 2025, often makes the most sense. Next, a look at recent trends in silver prices. Recent headlines have noted silver has surpassed gold's well-publicized rise in 2025, leading some investors to wonder whether they should add silver to their portfolios. Unlike gold, which has limited commercial uses, silver is a key ingredient in circuit boards, electronic switches, solar panels, and more, and those varied industrial applications mean more supply and demand drivers can affect prices. For example, some have suggested that regulatory headwinds in Mexico, Peru and China likely contributed to lower silver production this year, helping push prices up. While supply factors may be impacting prices, we think short-term sentiment swings are likely playing a key role in recent moves in silver prices, and those are nearly impossible to predict. Yes, silver is less susceptible to sentiment swings than gold, which has basically no industrial use. But even with its broader real-world demand, silver has still been prone to sentiment induced booms and busts. We've seen this before. In 2011, silver spiked on future supply and demand speculation, before crashing hard. In fact, if you had bought silver at practically any point in 2011, it would have taken almost 15 years to get your money back. To us, today's speculation over various potential supply and demand changes sounds similar. None of this makes short-term moves predictable, which is precisely the point. Trying to time these boom-bust cycles with any consistency is extremely difficult. As we explained in a recent MarketMinder article, because silver is prone to big busts and prolonged periods of underperformance, along with unpredictable booms, it doesn't qualify as a valid store of value, in our view. So, much like gold, we don't recommend attempting to forecast silver prices because we think doing so is nearly impossible. Sentiment has too much influence on price movement of such commodities, and we believe assets such as stocks and bonds remain better suited to the needs of long-term investors. That's it for this week. Thanks for tuning in to This Week in Review. If you're looking for more insights, then don't miss our other series, 3 Things You Need to Know This Week, released every Monday. You can also visit fisherinvestments.com any time for our latest thoughts on markets. Thanks again for joining us, Happy New Year, and don't forget to hit like and subscribe!