"2025 was not a normal year for stocks. Nvidia ( NASDAQ:NVDA ), the AI leader that dominated returns in prior years, has posted a solid but relatively modest gain of around 41% - a "bad" year by its recent standards. Yet standout performers emerged elsewhere: SanDisk ( NASDAQ:SNDK ), spun off from Western Digital ( ) earlier in the year, became the top S&P 500 stock, soaring almost 600% since its February IPO. Caterpillar ( ) delivered its strongest annual performance in recent memory, rising about 60%."
"These gains pushed the benchmark index to repeated record highs, and as the year draws to a close, it is up nearly 20% with dividends reinvested. However, the path was far from smooth. Major disruptions tested investor resolve, although the market repeatedly recovered. For most individuals, timing these swings is difficult, if not impossible. Panic selling during dips often means missing out on the subsequent rebound, while chasing winners risks buying high."
"An index fund tracking the S&P 500, such as the SPDR S&P 500 ETF Trust ( NYSEARCA:SPY ), captured the full upside without requiring constant decisions. This hands-off approach delivered strong results amid volatility, reinforcing why index investing remains the best strategy for most."
2025 produced extreme stock outcomes with a few standout winners driving major gains. Nvidia returned about 41%, while spun-off SanDisk surged nearly 600% and Caterpillar rose about 60%. The S&P 500 reached repeated record highs and finished the year up roughly 20% with dividends reinvested. The market experienced sharp disruptions, including a 12% plunge after an April tariff announcement that later eased. Those swings made timing difficult for most investors and increased the risk of missing rebounds or buying at peaks. Broad index funds captured market gains without frequent trading and reduced the need for active decisions.
Read at 24/7 Wall St.
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