I hope you’re doing well and enjoying a positive start to the new year. We’re pleased to share a summary update from our partner, Stratos Investment Management, on what happened in 2025 and what we’re watching as we head into 2026.
The U.S. economy stayed resilient in 2025, supported by steady consumer spending and strong business investment—especially in intellectual property and technology-related assets. The Federal Reserve cut rates three times late in the year and may cut a bit more in 2026 as leadership changes and policy focus shifts more toward supporting employment.
Stocks delivered a third straight year of double-digit gains, with performance broadening beyond the “Magnificent Seven.” Large-cap stocks continued to lead, but many other sectors participated more meaningfully. International markets outperformed U.S. markets in 2025, helped by a softer U.S. dollar. A modestly weaker dollar in 2026 could allow international stocks to keep pace or outperform again.
Bond returns were solid in 2025, and similar results may be possible in 2026 as the yield curve may steepen, and the Fed continues balance-sheet expansion. Tariff-related court rulings could temporarily influence interest rates.
Looking ahead, market volatility may rise, and performance may broaden into more value-oriented and non-tech sectors. We believe staying diversified and rebalancing regularly remain the most effective ways to manage risk.
Thank you for taking a moment to read this update. As always, I’m here if you’d like to discuss your portfolio or the outlook in more detail.
Daryl Marsden
Investment Advisor
