With just four trading days remaining in 2025, it's time for a year-end portfolio checkup. The S&P 500's roughly 17% gain masks significant dispersion—some assets soared while others plunged. Understanding what worked (and what didn't) provides valuable context for positioning in 2026.

The Big Picture

Major index performance year-to-date:

  • S&P 500: +17% (third consecutive year of double-digit gains)
  • Nasdaq Composite: +22% (tech leadership continues)
  • Dow Jones: +14.5%
  • Russell 2000: +15% (small caps finally participating)

2025's Biggest Winners

Gold (+70%): The year's standout performer. Geopolitical uncertainty, rate cut expectations, and central bank buying drove gold to record highs above $4,500. Silver (+158%) was even stronger.

Bitcoin (net positive despite volatility): Despite recent weakness, Bitcoin remains higher for the year. ETF adoption and institutional buying provided support even as prices pulled back from highs.

Nvidia (+30%): While underperforming 2024's explosive gains, Nvidia continued delivering as the AI chip leader. The $20 billion Groq acquisition caps a strong year.

Small caps (Russell 2000 +15%): After years of underperformance, small caps rallied as investors rotated from mega-cap tech. The catch-up trade may continue.

Energy: Oil and gas stocks benefited from geopolitical tensions and disciplined capital allocation.

2025's Biggest Losers

Oracle (-45% from peak): The poster child for AI spending concerns. Massive capex without clear returns sent shares tumbling.

Nike (-20%): Competition, China weakness, and strategic missteps weighed on the athletic wear giant—though Tim Cook's insider purchase sparked hope.

Consumer discretionary laggards: Companies serving price-sensitive consumers struggled with the "K-shaped" economy.

Some biotech: Rising rates and funding challenges hurt unprofitable biotechs.

China exposure: Companies with heavy China revenue faced headwinds from weak consumer demand and geopolitical tensions.

Sector Performance Review

  • Technology: Led by AI beneficiaries; wide dispersion within sector
  • Financials: Strong year aided by rate environment
  • Healthcare: Mixed; pharma deals provided bright spots
  • Consumer: Bifurcated between luxury (strong) and discount (weak)
  • Real estate: Pressure from elevated rates
  • Utilities: Underperformed despite AI data center demand

Key Lessons from 2025

What we learned this year:

1. AI hype has limits: Oracle's collapse showed investors now demand returns on AI spending, not just promises.

2. Diversification paid off: Gold's 70% gain rewarded investors who looked beyond stocks.

3. The economy is K-shaped: Strong aggregate numbers masked divergence between wealthy and working-class consumers.

4. The Fed moves slowly: Rate cuts came, but more slowly than expected.

5. Geopolitics matters: Tariffs, sanctions, and conflicts affected multiple asset classes.

Portfolio Actions to Consider

Rebalance: After another strong year for stocks, your allocation may have drifted. Consider trimming winners to restore target weights.

Tax-loss harvest: Sell losers to offset gains (deadline approaching).

Review winners: Position sizes in AI stocks may be oversized after big gains.

Check expenses: Year-end is a good time to review fund fees and trading costs.

Assess risk: After three strong years, consider whether you're taking appropriate risk for your goals.

What Could Work in 2026

Themes that may continue:

  • AI (selectively): Companies with clear returns on AI investment
  • Precious metals: If geopolitical tensions persist
  • Small caps: Catch-up trade may have legs
  • Dividends: Income becomes more attractive if rates fall

Potential reversals:

  • Beaten-down quality: Strong companies that struggled (Nike?) may rebound
  • International: Non-U.S. stocks trade at historic discounts
  • Bonds: If the Fed eventually cuts more than expected

What Could Disappoint

Watch out for:

  • Crowded trades: AI stocks with extreme valuations
  • Rate-sensitive plays: If the Fed stays on hold longer
  • Leveraged positions: After three strong years, complacency is dangerous

The Bottom Line

2025 was another strong year for investors—but with important nuances. Gold outperformed stocks. Oracle crashed while Nvidia rose. Small caps finally participated. As you head into 2026, use this year-end checkup to ensure your portfolio reflects lessons learned and positions you for what's next. Three consecutive years of double-digit stock gains is unusual; some reversion toward average returns is likely eventually. Stay diversified, stay disciplined, and stay focused on your long-term goals.