As 2025 draws to a close, we sat down with Chris Wilson, Co-CEO of Harbour Asset Management to reflect on the year that was. From policy pivots to political headlines, markets have faced a complex mix of challenges and opportunities. Despite this, most asset classes have delivered positive returns, and investors with a long-term view continue to see opportunities across different sectors and regions. 

How did global markets perform this year?

Equity markets posted strong returns, with the S&P 500 index reaching record highs. Tech giants like Alphabet (Google) and Nvidia led the charge, supported by impressive earnings growth and more recently, optimism around US-China trade negotiations. Nvidia became the first company to reach a US$5 trillion market valuation, highlighting the scale of investor enthusiasm for AI-linked growth.

What triggered volatility in April?

Markets were shaken in early April by sweeping tariff announcements from President Trump on ’Liberation Day’ . The initial shock triggered a sharp sell-off, with the S&P 500 falling over 12% in a week post-announcement before recovering later in the month.

Investor sentiment improved as trade tensions eased, and US corporate earnings exceeded expectations. However, the uncertainty around global trade policy and its impact on growth remains a key theme heading into 2026.

How did central banks respond to economic conditions?

The US Federal Reserve cut rates twice, bringing the federal funds rate target range to 3.75%–4.00%. Inflation showed signs of easing, and the Reserve Bank of New Zealand (RBNZ) reduced the Official Cash Rate to 2.25% and relaxed loan-to-value ratio (LVR) restrictions to support the housing market.

What’s the outlook for New Zealand’s economy?

The domestic economy is showing early signs of a recovery. The RBNZ is expected to maintain accommodative settings well into 2026, supporting an export-led recovery with Fonterra’s high payout and upcoming capital return. Green shoots are emerging across retail and construction, while the housing market remains soft it should respond to lower mortgage rates over summer, positioning the economy for gradual improvement through 2026.

KiwiSaver has seen some changes this year - what’s the most important thing for members to know?

The most significant development has been the move to increase contributions to 4% by 2028. This is a step in the right direction, and could help the average earner’s retirement funds last up to 30% longer, according to the Retirement Commission. A clear, long-term roadmap for KiwiSaver is essential to deliver better retirement outcomes for all New Zealanders.

Why does diversification matter in this environment?

In an environment shaped by shifting central bank policy and geopolitical uncertainty, diversification remains as important as ever. Spreading investments across sectors, regions and asset types helps reduce concentration risk and allows portfolios to benefit from different market drivers.

While overall performance has been strong, periods of volatility and price fluctuations have been a consistent feature of 2025. These movements are a normal part of investing, and understanding that volatility is key to helping investors remain focused on their long-term goals.

Are scams still a concern for investors?

Yes - and vigilance is more important than ever. Pump-and-dump scams have surged in New Zealand, with scammers using deepfake ads, social media, and encrypted messaging platforms to lure investors into fake ’investment clubs’.  These scams often begin with legitimate-looking trades in well-known companies, before shifting to low-value overseas shares that are artificially inflated and then dumped.

The Financial Markets Authority (FMA) warns that these scams are not new, but they are becoming more sophisticated. Victims are often targeted again through “recovery scams”, where fraudsters pose as agents offering refunds in exchange for personal information or fees.

The bottom line is clear - scams are evolving, not disappearing. Investors should be more vigilant than ever. Be cautious with financial ads on social media, avoid unsolicited investment messages, and verify any advice with a licensed financial adviser. If it sounds too good to be true, it probably is.

What’s your view heading into 2026?

We continue to monitor global and domestic markets closely. While volatility is likely to persist, opportunities remain in sectors supported by structural trends such as technology, infrastructure, and sustainability. With valuations in some areas appearing stretched, we may experience periods of adjustment along the way. We encourage investors to stay diversified and focused on long-term goals.