Behavior Checkup 2025: Did Your Investing Actions Truly Match Your Beliefs?

Year-end performance is important, but the real value of 2025 lies in how closely your actions reflected your investing beliefs and written plan. When what you do matches what you believe, you’re more likely to stick with your investments, avoid costly mistakes, and benefit from the returns that unpredictable markets can offer over time.

Remember What You Expected

Start by thinking back to what you believed at the beginning of January 2025.

• What kind of returns did you think were reasonable, given the economy and market outlook?
• How much of a downturn did you feel you could handle, especially with risks like inflation, policy changes, or unexpected global events in mind?
• How confident were you in your discipline back then, knowing that letting emotions take over can often lead investors to underperform the very markets they’re in?

Writing down these expectations—ideally in an investment policy statement—gives you a clear benchmark for reflecting on your 2025 behavior. Having that record makes it much easier to see if your decisions later in the year were thoughtful responses to new information or just emotional reactions.

How You Actually Responded

Next, walk through the year month by month and notice how you acted during the toughest periods of market ups and downs.

• Did you stick with your investments when negative headlines and sharp drops challenged your resolve, only to see the markets bounce back later?
• Or did you sell, move to cash, or chase the latest hot trends—even though history shows that staying invested during downturns often helps investors benefit from the recovery?

Think of this as a behavioral check-in, not a blame session. Noticing where you followed your plan—and where you didn’t—can show whether your portfolio is really a good fit for you and if your protections against panic or following the crowd are strong enough.

What Your Behavior Says About Risk

How you acted in 2025 is often a more honest reflection of your real risk tolerance than any questionnaire could reveal.

• If you lost sleep or felt the urge to make trades every time the market dipped, your actual risk tolerance might be lower than you thought.
• On the other hand, if you stayed calm—or even rebalanced your investments when things looked shaky—you might actually be able to take on more risk as you work toward your long-term goals.

Patterns like loss aversion, recency bias, and herd mentality can push us to sell low, buy high, and fall behind the market. Recognizing which of these showed up for you in 2025 can turn vague regrets into specific patterns you can actually address.

Turning 2025 Lessons Into 2026 Rules

Once you spot the gaps between your beliefs and your actions, use those lessons to set new ground rules for yourself in 2026.

• Strengthen your framework: Define target allocations, set clear rebalancing ranges, and decide in advance when you will—or won’t—make changes. That way, your decisions are less likely to be driven by emotions in the moment.
• Improve communication: Set up regular check-ins with your advisor to review your risk tolerance, stress-test your plan against years like 2025, and make sure your portfolio still matches your timeline and goals.
• Refine your mix of assets: If the ups and downs felt overwhelming, consider moving to a more conservative, diversified mix that still aims for growth but better cushions the downside. If you were too cautious and often watched markets recover without you, it might make sense to add a bit more equity to your portfolio.

You can’t eliminate emotion, but you can set things up so your feelings don’t take over your financial decisions. When your beliefs, strategy, and everyday actions are in sync, it’s much harder for the market to knock you off course—even in a year as unpredictable as 2025.

Disclosure: This material is for informational purposes only and is not intended as investment, tax, or legal advice. Past performance is no guarantee of future results, and all investing involves risk, including the possible loss of principal. Investors should consult with a qualified financial professional to determine an appropriate strategy based on their individual objectives, risk tolerance, and financial circumstances.

Sources

• Sequoia Financial Group – “Keeping Calm and Carrying On: How Behavioral Finance Can Help You Navigate Market Volatility”: https://www.sequoia-financial.com/keeping-calm-and-carrying-on-how-behavioral-finance-can-help-you-navigate-market-volatility/​
• Finance Monthly – “Understanding Risk Tolerance in Investing 2025”: https://www.finance-monthly.com/risk-tolerance-investing-2025/​
• T. Rowe Price – “Is it smart to keep money invested in equities during market volatility?”: https://www.troweprice.com/en/is/insights/is-it-smart-to-keep-money-invested-in-equities-during-market-volatility​
• Ameriprise Financial – “Tips to stay invested during market volatility”: https://www.ameriprise.com/financial-goals-priorities/investing/stay-invested-during-market-volatility​
• IG – “2025 market wrap-up: Volatility, AI dominance and geopolitics”: https://www.ig.com/uk/trading-strategies/2025-market-wrap-up--volatility--ai-dominance-and-geopolitics-251219​
• Fiduciary Trust – “Q4 Market Outlook: Navigating 2025’s Market Paradox”: https://www.fiduciary-trust.com/insights/market-outlook/​

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