In this Quarterly Investment Update, we unpack why silver surged so sharply through 2025 and why that same momentum quickly reversed. From global market performance to a dramatic silver price correction, this update highlights how volatility, diversification, and investor behaviour shaped the final quarter of the year.
Global Markets: Strong Finishes and Shifting Leadership
This Quarterly Investment Update shows that global markets ended 2025 on a high, delivering one of the strongest years since the pandemic. In the final quarter alone, global markets returned 4.1%, while global equities delivered 4%, a significant result for a single quarter.
While the US market still posted strong gains of close to 18% for the year, leadership shifted. European and emerging markets outperformed, in some cases delivering nearly double the returns of US equities. Investors began reassessing concentration risk, recognising that relying too heavily on US tech stocks exposed portfolios to unnecessary volatility.
Rather than a flight to safety, this shift reflected a renewed focus on diversification – balancing return potential against downside risk and acknowledging that strong past performance does not guarantee future results.
Fixed Interest and Property: Tug-of-War Conditions
Interest-rate-sensitive assets continued to struggle. Bonds and listed property were under pressure as wholesale interest rates moved higher, making older lower-yield bonds less attractive. New Zealand listed property declined 4% over three months, reflecting the ongoing impact of elevated interest rates.
Government bonds also faced challenges, particularly as long-term interest rates rose. The discussion highlighted that bond values move inversely to interest rates – a dynamic that surprised many investors during recent tightening cycles.
Why Silver Surged - Then Fell Hard
The most dramatic story in this Quarterly Investment Update was silver.
By the end of 2025, silver had risen 140%, far outpacing gold, which gained 65% over the same period. Unlike gold, silver plays a dual role – both as a store of value and as a critical industrial metal. Demand has been driven by green technology, electric vehicles, and its irreplaceable use in high-performance electronics.
Compounding this was a fifth consecutive year of global silver supply deficits, meaning demand continued to exceed available supply.
However, silver’s smaller market size makes it far more volatile than gold. With a total market capitalisation estimated around $2 trillion, compared to gold’s roughly $30 trillion, price swings can be extreme. As momentum built, FOMO and leveraged ETF exposure amplified gains – but also magnified losses.
In early 2026, silver experienced a sharp reality check. Prices fell around 30% in a single day, marking the worst session since the 1980s. Much of the volatility was attributed to leveraged ETFs, which are designed for short-term trading but were often used as long-term holdings by retail investors.
Portfolio Performance: Context Matters
Despite volatility in specific assets, diversified portfolios continued to perform strongly:
-
Defensive portfolios delivered 6.3% over 12 months and 7.4% over three years
-
Balanced portfolios returned 11% over 12 months and 12% over three years
-
Growth portfolios returned 16.9% over 12 months and 18% over three years
Markets have been strong, but the discussion emphasised the importance of having a long-term plan. Exiting markets entirely can be just as risky as staying invested during volatile periods.
Key Takeaways
-
Silver surged 140% in 2025 before experiencing a 30% single-day drop
-
Smaller market size makes silver far more volatile than gold
-
Leveraged ETFs amplified both gains and losses
-
Global markets finished 2025 strongly, but leadership shifted beyond the US
-
Diversification remains critical in managing concentration and volatility risk
-
Long-term planning matters more than reacting to short-term market moves
Next Steps
If you’ve been thinking about building a financial plan or reviewing your investment strategy, Lighthouse Wealth offers a free initial chat with a financial adviser to help you align your portfolio with your goals.
If you’d like to watch more, check out these other episodes below.
For a no obligation discussion to see how we can help you on the path to wealth, please contact us.
Disclaimer:
The information in this article is general information only, is provided free of charge and does not constitute professional advice. We try to keep the information up to date. However, to the fullest extent permitted by law, we disclaim all warranties, express or implied, in relation to this article – including (without limitation) warranties as to accuracy, completeness and fitness for any particular purpose. Please seek independent advice before acting on any information in this article.
