Chart of the Week: New Year's Day

In the Marlborough multi-asset solutions team, we begin each year by gathering at an off-site location to reflect on our investment processes, consider how we can refine our approach and prepare for the challenges and opportunities ahead. This dedicated time away from the day-to-day routine helps us embrace one of our group’s core values, a Growth Mindset. This is a principle rooted in adaptability, resilience and continuous learning. It feels particularly fitting as we prepare for the Chinese Year of the Snake, which begins on Wednesday.

In Chinese culture, the snake symbolises transformation, wisdom and strategy. These qualities are essential for navigating today’s complex investment landscape, in which rapid technological advances, evolving geopolitics and shifting monetary policies demand a thoughtful and flexible approach.

The chart below shows that historically the Year of the Snake has been the second-weakest year on average, after the horse, for US stock market returns. This though doesn’t mean that 2025 will be a poor year. Along with some falls, the S&P 500 has seen plenty of positive performances during snake years. Returns in the four most recent Years of the Snake were 2013: +29.6%, 2001: -13.0%, 1989: +27.3% and 1977: -11.5%.

So, how can reflecting on the Year of the Snake help us to navigate the investment landscape in 2025?

The snake is known for its ability to navigate challenges carefully and strategically. This could symbolise the need for investors to remain agile and thoughtful, especially in an environment of evolving global economic dynamics, with trade and tariffs high on the agenda.

Snakes shed their skin, representing renewal and transformation. This could align with trends like the ongoing digital revolution and advances in artificial intelligence (AI), with companies looking to integrate AI tools to help them transform into stronger, more efficient businesses. This remains an important theme for investors.

The snake's cautious nature reminds investors of the importance of risk management. With the potential for volatility in markets – whether due to inflation concerns, shifts in interest rates or geopolitical events – taking a measured, well-researched approach will be crucial.

Much like the snake sheds its skin to adapt and grow, multi-asset investing is about embracing change and seeking opportunities across a range of asset classes. It’s a strategy that prioritises balance. In an uncertain market environment, we still seek to capture growth potential, while managing risk.

As we begin this transformational year, we remain focused on the importance of diversification and alert to the fact that no single asset class consistently outperforms. The beauty of a multi-asset approach lies in the ability to adapt, blending different sources of returns to build portfolios that are prepared for changes in the investment landscape.

In the Year of the Snake, we will be mindful of the power of transformation. Just as the snake uses strategy and foresight to achieve its goals, we will use this approach to help our clients navigate challenges and seize opportunities.

Key takeaway: Combining the power of diversified multi-asset portfolios and our Growth Mindset, we are committed to delivering first-class outcomes for clients in the Year of the Snake.

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This article is provided for general information purposes only and should not be construed as personal financial advice to invest in any fund or product. These are the investment manager’s views at the time of writing and should not be construed as investment advice. The opinions expressed are correct at time of writing and may be subject to change. Capital is at risk. The value and income from investments can go down as well as up and are not guaranteed. An investor may get back significantly less than they invest. Past performance is not a reliable indicator of current or future performance and should not be the sole factor considered when selecting funds.