December 2025 Market Check-In: Year End Reflections

Market Overview

December brought a fitting close to a strong year for equity markets. The S&P 500 finished 2025 with impressive gains, marking back-to-back years of above-average returns. Small-cap stocks, after lagging for much of the year, showed signs of life in the final quarter.

The Federal Reserve delivered its final rate decision of the year with no surprises, and bond markets ended the year on a stable note. Credit markets remained healthy, with corporate bond spreads at historically tight levels.

Portfolio Impact

2025 rewarded patient, diversified investors. While concentration in mega-cap technology stocks dominated the headlines, balanced portfolios with exposure to fixed income, international markets, and alternative investments also delivered solid risk-adjusted returns.

Tax-loss harvesting activity in Q3 and Q4 created meaningful value for taxable accounts, offsetting gains and improving after-tax outcomes.

Looking Ahead

As we enter 2026, we are cautiously optimistic. Valuations in some segments of the market are stretched, but earnings growth remains supportive. We will continue to focus on what we can control: asset allocation, tax management, and keeping your plan on track.

Thank you for your trust throughout 2025. We look forward to the year ahead.

This commentary is for informational purposes only and does not constitute investment advice.