Uncommon Sense
July 2025 – Newsletter
Enjoy this month’s instalment of our newsletter. As always, it is packed with links that you may find interesting, a downloadable copy can be found via this link Halcyon’s Uncommon Sense – July Newsletter.
The Stock Markets – June 2025
The key benchmark you should care about is achieving all of your financial and life goals – and not running out of money.
Monthly figures are a distraction from your long-term goals.
Source: FE Analytics, Humans Under Management. Returns are based on total return indices, assuming all dividends are reinvested.
The Unimportant Numbers – 1 Month
| Market | Return |
|---|---|
| UK Equities | +0.5% |
| Global Equities | +3.8% |
| US Equities | +5.1% |
The Important Numbers – 30 Years
| Market | Annual Return |
|---|---|
| UK Equities | +7.3% p.a. |
| Global Equities | +8.4% p.a. |
| US Equities | +9.9% p.a. |
Inflation: The Real Enemy
The number one enemy of the long-term investor is the financial dragon called inflation – the silent but steady increase of prices over time.
An investment in the global share market has consistently provided protection from this enemy. To earn this return, you had to be willing to see your investment value temporarily decline by about -15% on average every year, without being panicked into selling. A visual graph can be found here – Inflation – The Real Enemy.
The Bumpy Road to New Highs – 2025 Midyear Review
What’s Happened
The first half of 2025 demonstrated a return to normal market volatility. Following exceptional returns in 2023 and 2024 – which came with unusually low volatility – markets reminded us that calm periods never last.
Inflation, a persistent concern in recent years, began approaching target levels across major economies. This helped remove a significant source of uncertainty that had weighed on markets and sentiment.
However, geopolitical tensions remained. New developments between Israel and Iran added to ongoing conflicts – another reminder that geopolitical concerns are a constant feature of the investment landscape.
After reaching new highs in February, markets declined due to concerns about technology valuations. This decline accelerated on April 2nd when President Trump announced sweeping tariffs affecting nearly all trading partners. Markets reacted sharply, falling over 20% in some cases and entering bear territory.
By late April, tariff policies were scaled back. Most global markets are now positive for the year and many have reached new all-time highs – a remarkable turnaround given the pessimism just 10 weeks earlier.
What We’ve Learned
- Markets often overreact to headlines – The “Liberation Day” tariff announcement led to panic, yet the policy was scaled back soon after. This highlights how sentiment can swing wildly, even when fundamentals haven’t changed.
- Market timing remains impossible – Remaining invested during downturns proved, once again, to be the only reliable way to earn long-term returns. Those who sold missed the recovery.- –
- Volatility is normal. Make it your friend, not your foe – Temporary declines enable long-term investors to earn superior returns. Volatility isn’t a flaw – it’s the price of entry to owning the great companies of the world.
Looking Ahead
The second half of 2025 will bring fresh challenges. History tells us the future is unpredictable – filled with both surprises and opportunities.
Corrections typically happen once a year. Investors shouldn’t be surprised when markets behave in line with historical patterns. Whether driven by geopolitics, trade tensions, or something unforeseen, we face them with patience, discipline, and a long-term view.
It’s not always easy to stay the course. But doing so moves you closer to your financial goals. We’re privileged to support you through these inevitable cycles, helping you build confidence and perspective along the way.
The halfway mark of the year is a great time to pause and reflect. The more we understand investing history, the more prepared we are for whatever comes next.
“It’s never different this time.”
Rational Optimism
The media rarely supports the disciplined, long-term investor. Headlines focus on short-term drama, predictions, and negativity – ignoring what really drives lifetime investor success.
So, as an antidote to that noise, here are a few things going right in the world:
- UK Cancer Survival Rate Doubles Since 1970s – Half of those diagnosed now survive for 10+ years, up from 24%. Read the full article
- Global Extreme Poverty Rate Fell from 2022 to 2025 – Updated estimates show a meaningful reduction in global poverty. Read the full article
- Tesla Rolls Out Robotaxis in Texas – Tesla began testing self-driving robotaxis with paying passengers in Austin. Read the full article
Recommended Reading
- The One Realisation That Can Change Everything About Your Finances (8-minute read)
- The Real Currency Of Life (4-minute read)
- You Are What You Won’t Do For Money (9-minute read)
- The Joneses Aren’t That Happy (3-minute read)
- Why Financial Success Does Not Equal Financial Wellness (4-minute read)
- Why Financial Independence is Overrated (5-minute read)
Visual Insights
- 40 Best Countries in the World, According to People – A perception-based ranking of 40 countries judged across 73 attributes by over 17,000 people.
Read the full article - Top 25 Countries With the Highest Life Expectancy – Life expectancy remains one of the clearest indicators of overall well-being and healthcare quality.
Read the full article - Productivity Gains from Using AI – A fascinating chart comparing time spent on 18 common work tasks with and without generative AI tools (based on research by Stanford & the World Bank).
Read the full article
We hope you enjoyed this month’s newsletter.
If you have any feedback, questions, or even your own news to share – please get in touch. As always, we’re here for you.
See you next month,
The Halcyon Team