2025 reminded us that markets rarely move in straight lines and surprise us often when uncertainty feels highest. Despite ongoing geopolitical tensions, mixed economic signals, tariff-related concerns, and domestic policy uncertainty, major market indices delivered robust returns that exceeded most expectations.

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Over the course of the year, the unemployment rate rose to 4.6%^1, consumer sentiment remained nearly 30% below year-earlier levels2, and CPI inflation registered 2.7%^3—stubbornly above the Fed's target. The government experienced a shutdown, tariff policies disrupted trade relationships, interest rates remained elevated, and the U.S. dollar fell 9.4%^4. In April, the Nasdaq had fallen approximately 21% from its highs, driven by concerns over tariff announcements, government spending cuts, and weakening economic indicators. Despite all this, by year-end, the S&P 500 gained 16.4%, the Nasdaq surged 20%, and the Dow rose 13%^5—marking the third consecutive year of double-digit gains.

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Given these headwinds, how did markets manage to deliver such strong returns? In our opinion, several factors contributed such as: corporate earnings remained robust as did investor optimism - particularly in tech and AI-related sectors, Trump walked back some of the most severe tariff proposals, companies found ways to pivot around tariffs, interest rate cuts throughout the year provided monetary accommodation, and third-quarter GDP growth came in at 4.3%, well above expectations, indicating underlying economic strength.

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Another striking development was the extraordinary performance of precious metals. Gold prices surged 65%, marking the sharpest annual gain since 1979, while silver skyrocketed 144%^6. Historically, such dramatic increases in precious metal prices have indicated investor concerns about currency debasement, inflation risks, and geopolitical uncertainty – all of which are present today. While official CPI figures suggest inflation is moderating, these markets appear to be pricing in different expectations, possibly indicating that inflation pressures are more persistent or widespread than headline numbers suggest.

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As we enter 2026, we remain cautiously optimistic. The One Big Beautiful Bill Act (OBBBA) is now in effect. It makes the tax provisions from 2017 permanent, including lower corporate rates and enhanced business provisions, which are expected to increase GDP by 1.2%^7. Combined with reduced regulatory burdens, particularly on publicly traded corporations, this pro-growth policy environment may provide tailwinds for equity markets.

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As always, we remain mindful of ongoing volatility and economic uncertainties. As your advisors, we are monitoring inflation signals closely, maintaining portfolio diversification, and actively managing risk. While significant challenges remain, our disciplined, patient approach to investing continues to guide us toward your long-term financial goals.

Thank you for your continued confidence in us. We encourage you to reach out with any questions about your portfolio or if there are changes to your financial picture. We wish you and your family a healthy and prosperous 2026.

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Regards,

Scott Lasky, CFP®

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​ [^1]: U.S. Bureau of Labor Statistics, unemployment rate November 2025 [^2]: University of Michigan Consumer Sentiment Index, December 2025 [^3]: U.S. Bureau of Labor Statistics, Consumer Price Index, 12 months ending November 2025 [^4]: 2025 U.S. Dollar Index (DXY) annual performance 2025 [^5]: Stock market performance data from financial market indices as of December [^6]: Gold and silver spot prices, annual performance 2025  [^7]: Tax Foundation analysis of One Big Beautiful Bill Act economic impact

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Content should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change. Material presented is believed to be from reliable sources, however, we make no representations as to its accuracy or completeness. All information and ideas should be discussed in detail with your financial advisor prior to implementation.

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