Every December, financial publications compete to tell you which stocks will soar in the coming year. Experts are wheeled out. Predictions are made with great confidence. And twelve months later? Well, let’s just say the results are instructive.
Let’s look at some of the predictions made at the start of 2025 and what actually happened… so far.
The winners
Palantir: After quadrupling in 2024, many thought the AI darling had surely peaked. Wrong. Palantir has continued its remarkable run in 2025, remaining one of the top performers in the S&P 500. US commercial revenue grew 93% year-on-year in recent quarters. The few analysts brave enough to stick with it are looking rather clever.
Gold miners: With gold prices surging to over $3,300 per ounce, Newmont and other gold miners have delivered spectacular returns this year. Not exactly the sexy AI picks that dominated the prediction columns, but the boring commodity play has handsomely rewarded patient investors.
Western Digital: Up over 200% year-to-date, this data storage company wasn’t on many ‘must buy’ lists twelve months ago. Yet here we are.
The losers
The Trade Desk: Once a Wall Street favourite, this ad-tech company has been the worst performer in the S&P 500 this year, down around 66%. Privacy concerns and disappointing guidance have hammered the stock. Several analysts had it as a top pick for 2025.
Lululemon: The athleisure favourite has had a torrid year, significantly underperforming the market as consumer spending shifted and competition intensified. Many predicted the premium brand would thrive – it hasn’t.
Victoria’s Secret: Down over 55% this year after tariff impacts, a cybersecurity breach, and poor execution. Multiple activist investors have called for a complete board overhaul. Not quite the recovery story some predicted.
And for 2026?
Right on schedule, the predictions are rolling in again. Morgan Stanley expects the S&P 500 to rise to 7,800 by end of 2026 – a 14% gain. RBC is forecasting 7,100. Federated Hermes sees 7,500.
The themes? AI infrastructure remains dominant. Some analysts worry about an AI bubble forming. Healthcare is being tipped after underperforming. Value stocks and small caps are supposedly due their moment. There’s talk of inflation returning and concerns about elevated valuations.
Morningstar’s 2026 Outlook puts it rather well: “Markets have a way of humbling even the sharpest forecasters.” They note how Wall Street firms set lofty expectations for 2025, slashed their targets after the April tariff shock, then raised them again as prices recovered. Anyone following those forecasts would have bought high and sold low – exactly what must be avoided to ensure a successful investing journey.
The real winners
Here’s what we actually know. A globally diversified portfolio – the boring approach that doesn’t make headlines – has delivered solid returns in 2025 without requiring you to correctly predict which AI company would keep surging or which retailer would collapse.
Vanguard’s research makes a compelling point: taking the ‘just pick last year’s winners’ argument to its logical conclusion leads you to a one-stock portfolio. What if you’d concentrated in a high-flyer that crashed? The uncomfortable truth is that diversification across regions and asset classes has delivered close to 10% annualised returns over the past decade – respectable returns with considerably less risk than trying to pick individual winners.
Not so fun fact: the professionals get it wrong more often than they get it right. Does that even make them professionals? I’m not sure, but I do know the exciting stock picks that dominate December headlines are entertainment as much as investment advice.
The boring conclusion
We’ll leave the stock picking to the pundits. Our view remains unchanged: a well-diversified portfolio, held patiently over time, remains the most reliable path to meeting your financial goals. It won’t generate exciting headlines. But it will let you sleep at night.
If you’d like to understand more about how we build portfolios that let you ignore the annual prediction circus, get in touch.
