This complete article first appeared in Livewire on 8 January 2026
In a year as frantic and fluid as 2025, it can be hard to know what is a valuable learning experience and what is just noise.
But it goes without saying that eventful times in markets will always throw up the opportunity for some new lessons and some old lessons best relearned.
As part of our 2026 Outlook Series, we asked 10 leading fund managers to share the key lesson they learnt in 2025 and how that's informing their approach going into 2026.
From trimming winners too early to working out how to play the big market shifts, these lessons from 2025 should help you become a better investor in the year ahead.
From James Abela - Lesson: The risk of extrapolation
Portfolio Manager of the Fidelity Future Leaders Fund and Fidelity Global Future Leaders strategy.
The lesson is extrapolation and the risk of extrapolation. Because of the strength of the market in resources, technology, and defence - the market got very excited about all these things during 2025. We saw stocks like Temple & Webster - down 30%, DroneShield - down 60%, and some resources stocks down 20 or 30%. The market got excited about certain clusters of momentum, but when the stocks disappointed, the downside was quite large.
I think there may be a risk if you extrapolate the excitement of 2025 through into 2026. We've already seen some signs that we should be careful about extrapolating that excitement in growth or momentum. I think investors should keep an eye on earnings and watch expectations where they are, because it was at a very high level during 2025 and leading into 2026, I imagine, after some pretty strong years, that extrapolation and enthusiasm is going to be tempered somewhat in 2026.
