2025 Year in Review: International Stocks, Gold Rally & What Defined the Market | Ep 28

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As we settle into 2026, Adam and Andy take a look back at the charts and trends that defined 2025. It was a year that ended up looking calm on paper (S&P 500 up just under 18%), but delivered plenty of drama along the way, including a near-bear market in April that recovered within weeks.

More importantly, some of the year's biggest stories flew under the radar. International stocks quietly crushed U.S. returns. Gold outperformed Bitcoin. Bonds finally delivered the returns investors had been waiting for since 2022. And the U.S. economy posted its strongest GDP growth in over a decade, defying recession predictions that started back in 2022.

The Round Trip Year

Before talking about specific trends, Adam set the stage by noting that 2025 was a "round trip year." The S&P 500 closed up just under 18% total return, which sounds straightforward. But buried in that number was a nearly 20% drawdown in April that happened over just a few days during the tariff talks.

The market came within a hair of officially entering bear market territory, then reversed course and rallied back to end the year solidly positive. For investors who stayed the course, the year-end number looked great. For anyone who panicked during the April selloff, it was a painful reminder that timing the market rarely works.

International Equities: The Quiet Winner

One of Adam's biggest takeaways from 2025 was the comeback of international equities. While the S&P 500 delivered that 17%+ return, both emerging markets and international developed markets pushed close to 30%. That's nearly double the U.S. performance.

Countries like China, Germany, and France led the way. Yet this story got surprisingly little attention. Andy pointed out that international markets actually grabbed headlines in April when they held up better during the U.S. selloff. But once both U.S. and international markets rallied together through the rest of the year, that outperformance felt quieter by December than it actually was.

The India cautionary tale provides an important counterpoint. India was the darling of 2024, delivering huge gains as one of the best-performing emerging markets. Coming into 2025, it would have been the "sexiest" country to invest in based on recent performance. Result? India was up just 1% for the entire year. For a while, it was even negative.

This is behavioral investing in action. The asset class or country that did best last year often disappoints the following year. Chasing recent performance rarely works, but it's a mistake investors make repeatedly.

Gold Beats Bitcoin (Really)

Add this to the 2025 bingo card: Gold outperformed Bitcoin. Along with silver, these commodities went on an unexpected tear, with gold generating significant returns while Bitcoin slid in the back half of the year.

Andy noted he's now getting client questions about silver specifically, something that almost never happens. His father-in-law was even quoting him silver prices over the holiday break. When precious metals enter mainstream conversation, it's usually a sign they've already had their run.

Andy explained there are narratives around why silver rallied (industrial uses in solar panels and AI chips, plus the gold-to-silver ratio suggesting silver was undervalued). But the real question is whether 2025's performance changes the investment case for holding these commodities long-term.

His answer: No. When they run portfolio optimization analysis considering virtually every investible asset class, commodities consistently fail to make the cut. They deliver equity-like volatility with substandard returns and don't provide meaningful diversification benefits. The math simply doesn't support including them for long-term wealth building.

The timing of investor enthusiasm for these assets makes this particularly concerning. When assets rally hard enough to enter everyday conversation, it's often a setup for the classic "buy high, set money on fire" scenario. Whatever your view on gold and silver was coming into 2025 should probably inform your decision now, not how well they performed last year.

The Bond Market Normalization

Bonds delivered a comeback story in 2025 that many investors missed because they'd already given up on fixed income after 2022's brutal selloff.

Andy walked through the mechanics. Bonds fell hard in 2022 when the Fed raised rates aggressively to fight inflation. Intermediate bonds were down around 12%, which felt shocking for something supposed to be "safe." The natural human reaction was to bail out.

But when bond prices fall, yields rise. So investors who stuck with bonds through 2022 entered 2023 and 2024 earning much higher yields. Then in 2025, rates fell slightly, which pushed bond prices back up. Bond investors got paid on both sides: higher yields plus price appreciation.

U.S. Treasuries were up around 6% in 2025. Emerging market debt (a newer addition to their portfolio mix) did even better. People who stayed patient through the 2022 pain got fully rewarded.

Looking forward, this matters because bonds now offer real cushion again. With yields higher than they've been in years, bonds can provide meaningful balance when (not if) equities hit another rough patch. When stocks sell off and investors flee to safety, those higher starting yields make bonds more attractive, and the resulting demand pushes prices up.

This is the kind of portfolio insurance effect that bonds couldn't deliver five or seven years ago when yields were near zero. The 2022 pain reset the bond market to a healthier place.

U.S. Economy Resilience

Adam highlighted the resilience of the U.S. economy as another defining feature of 2025. Economists have been calling for recession since 2022 (100% of Bloomberg-surveyed economists predicted one back then), yet we're still waiting nearly four years later.

Q3 2025 delivered the largest GDP growth in over a decade, with real GDP (after inflation) coming in at 3.5%. That's a gangbusters number that caught everyone's attention and solidified the economy's strength even as the labor market showed some cooling.

On top of that economic backdrop, Big Tech continued pouring staggering sums into AI infrastructure. Adam rattled off the numbers from just the first three quarters of 2025:

• Amazon: $92 billion in capex (up from $55 billion in 2024)
• Google: $64 billion (up from $38 billion)
• Microsoft: $53 billion (up from $40 billion)
• Meta: $48 billion (up from $23 billion)

To put $92 billion in perspective, many publicly traded companies don't even have a market cap that large, let alone that much cash to deploy. This level of investment creates real economic activity and supports the broader market.

The Under-appreciated Tax Cut Stimulus

Adam flagged one planning-related development that hasn't gotten enough attention: the stimulus effect of tax cuts from the "Big Beautiful Bill."

Working through year-end tax projections with clients, he noticed meaningful reductions in tax liability compared to prior years, especially for clients in states with high state and local tax. Between the senior deduction and the increased SALT cap limit, many people will see significant refunds in Q1 and Q2 of 2026.

What happens with that money? Some will get spent on goods and services. Some will get reinvested in markets. Either way, it's additional capital flowing into the economy that most people haven't fully appreciated yet. It's a real stimulus that could provide another tailwind.

Biggest Risks for 2026

Andy identified his biggest concern as the AI trade. With billions being thrown at AI infrastructure and these companies making up 35-40% of the S&P 500's weight, there's concentration risk. If the payoff from all that spending doesn't materialize as expected, weakness in those names could drag the entire index down.

The flip side is that we could still be in the early innings of a truly transformative technology that makes companies dramatically more efficient. But given the concentration and the spending levels, it's a risk factor worth monitoring.

Adam went with cybersecurity. Following the podcast episode with Max from Alles Technology (cybersecurity firm), he's more aware of the threats posed by AI-enabled bad actors who can now mimic voices and facial movements with frightening accuracy.

Both firms and individuals need heightened vigilance. It's not a sexy market risk, but it's one that could manifest in many different ways and cause real damage if people aren't prepared.

Taking Stock

Looking back at 2025, the year delivered plenty worth celebrating. International diversification paid off. Patient bond investors got rewarded. The U.S. economy proved resilient despite endless recession calls. And markets shrugged off a near-bear market to finish strongly.

As Adam put it, markets moved on real economic activity and corporate profitability improvements, not crazy assumptions or speculation. Companies reported strong earnings, GDP growth exceeded expectations, and fundamental factors supported stock prices. That's a healthy foundation.

Will 2026 bring surprises? Absolutely. A 10% correction is historically normal in any given year. Something unexpected could always knock markets off course. But the trends closing out 2025 suggest the foundation remains solid heading into the new year.

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