2025, a year that put everyone to the test: Lessons and portfolios for the investor

Portfolios compared in 2025: why did some hold up better than others, and why did others earn more? Here are the concrete lessons an investor can take away.

by Vincenzo Lana, investor and financial-economic commentator

2025 will be remembered as one of those years that exposed the strength of strategies. It was not a year of sudden, dramatic collapses, but neither was it a year of steady, reassuring growth. It was an awkward, nervous year, marked by contradictory moves, false starts and sudden shifts in market sentiment.

After a two-year period in which inflation had been the dominant theme and interest rates had profoundly changed the rules of the game, 2025 arrived as a year of transition. Central banks began to send more ambiguous signals: on one side, the desire not to strangle the economy; on the other, the need not to lose control of prices. This created a backdrop in which neither equities nor bonds had an easy time. Volatility remained constantly present, even when indices seemed to move very little. It was a kind of “underlying” volatility, made up of sector rotations, brief rallies that were quickly absorbed, and phases in which nothing seemed to work particularly well.

In this scenario, the classic “buy & hold equities” approach disappointed many investors, as did the traditional 60/40 portfolio, which for decades had been seen as a sort of pillar of prudent management. And yet, precisely in such a complex year, some portfolios showed surprising resilience. Others, by contrast, confirmed that what works in one market regime can stop working when the context changes. So, by comparing 2025 across the main multi-asset portfolios, using real data and focusing not just on the numbers, it is worth asking why one portfolio held up better than another, or why some even performed well in such an uncertain year and, above all, what concrete lessons an investor can take home.

Before going into the details of the individual portfolios, it is important to clarify one fundamental point: a portfolio is not simply the sum of the financial instruments placed inside it to build it, but the result of the relationships between the assets that compose it. Many investors focus on the asset that delivered the best return in a given period, but this approach only works ex post, because no one knows in advance which asset will be next year’s winner. The real work of the investor is not to predict, but to structure; so when we analyse a portfolio, we must look at at least five key elements:
- Return (how much it gained or lost).
- Volatility (how unstable it was along the way).
- Sharpe ratio (how much “quality” that return had relative to risk).
- VaR - Value at Risk (how much the portfolio could realistically have lost in a negative scenario).
- Consistency with the objective (did the portfolio do what it was designed to do?).
2025 was a perfect year for this kind of analysis, because it rewarded true diversification and punished unbalanced allocations or those too dependent on a single macroeconomic scenario.

Global 3 Assets Portfolio: Simplicity that holds up, but doesn’t thrill - The Global 3 Assets is one of the simplest and most intuitive portfolios: global equities for growth, bonds for stability, gold as insurance. It is a structure that makes no promises of miracles, but aims for robustness. In 2025, this portfolio did exactly what it was supposed to do. It did not shine, but it did not disappoint either. Return was positive, albeit modest, and risk remained under control. Gold played its role as a shock absorber during moments of tension, while the bond component suffered less than portfolios more exposed to long duration. The limitation of this portfolio is also its strength: simplicity. In a year in which gold and cash performed very well, having only a 10% allocation to gold and no real cash component prevented the Global 3 Assets from fully exploiting the environment. It is a portfolio suited to those who want peace of mind, but in 2025 it was not among the stars.

60/40 Portfolio: the myth that falters - For decades, 60/40 has been regarded as the gold standard of balanced management. Equities for growth, bonds for stability. The problem is that this model rests on one fundamental assumption: the negative correlation between equities and bond. In 2025, that assumption continued to work poorly. Global equities did not provide enough growth to make up for bond weakness, and bonds did not deliver the protection expected during stress periods. The result was a portfolio that ended the year in the red, with a negative Sharpe ratio: a sign that the risk taken was not rewarded. It was not a disaster, but it was a clear warning. Ultimately, 60/40 is not “dead”, but 2025 showed that it is not universal and that blindly relying on a historical formula can be dangerous.

Golden Butterfly Portfolio: The balance that surprises - The Golden Butterfly is a portfolio designed to improve return potential while maintaining strong diversification. In 2025 it worked very well. The small-cap value component benefited from market rotations, gold protected the portfolio in uncertain moments, and the combination of short- and long-term bonds made the portfolio extremely flexible. The most interesting figure is the Sharpe ratio: 0.80. That means every unit of risk was well rewarded. It was not the most profitable portfolio overall, but it was one of the most efficient. This is a portfolio that shows how diversification is not just “having lots of things”, but having things that react differently to the same events.

Global Market Portfolio: Theory versus reality - The Global Market Portfolio is fascinating from a theoretical standpoint, because it represents the “global market” as it is. The problem is that the global market, in 2025, was not kind. The small share of real assets was not enough to offset the weakness of equities and bonds. Volatility was high and returns were negative. This portfolio shows that replicating the market does not automatically mean being protected. In some years, the global market is simply inefficient from a risk/return perspective.

All Season Portfolio: Intelligent defense – Ray Dalio’s All Season portfolio was created to face every macroeconomic scenario: growth, recession, inflation, deflation. In 2025 it did its job: solid defense, modest return. It was not exciting, but it protected capital better than many more aggressive alternatives. It is a perfect portfolio for those who seek emotional stability more than absolute performance and “at any cost”, very good for those who want to shield themselves from excessive stress during the most volatile phases, while sacrificing the easy temptation of excitement.

Permanent Portfolio: The silent winner of 2025 - Harry Browne’s Permanent Portfolio is often underestimated because it is seen as “too cautious”. Yet in 2025 it was the best portfolio of all. The secret lies entirely in its structure: gold and liquidity benefited enormously from uncertainty, while the low equity exposure limited damage in negative moments. The result is high return with very low volatility. A Sharpe of 1.82 is extremely rare in such a difficult year. It means the portfolio not only produced returns, but did so in an extremely efficient way.

In conclusion, 2025 taught us one fundamental lesson: the winner is not the one who predicts, but the one who structures well. The most resilient portfolios were not the most exposed to equities, but those that managed to integrate gold, liquidity and assets with different behaviours. The myth of 60/40 was called into question, while strategies considered “boring” shone. For the investor, the message is clear: true diversification is not needed when everything is rising, but when nothing works as expected. And 2025 was exactly that kind of year. Whether this will be the new normal or just a transitional phase, time will tell. But one thing is certain: after 2025, we will look at multi-asset portfolios with much greater awareness.