2025 Fourth Quarter Commentary Report
Market Review
Global Market Performance
Global equities closed out the fourth quarter of 2025 with yet another round of gains. This marks three straight years of positive performance for global equities. These gains were despite seemingly negative developments: a prolonged government shutdown in October, consumer sentiment falling to near record lows in November, and unemployment rising in December. It’s just another reminder that markets don’t always respond the way we think they should and disciplined, long-term investors have often benefited from simply staying invested.
This quarter, value stocks outperformed while smaller companies underperformed both at home and abroad. For the quarter, and the year, international stocks outperformed, returning roughly double that of U.S. stocks.
Market Returns (Q4 2025)
U.S. Stocks: +2.40% Russell 3000 Index
International Developed Stocks: +5.20% MSCI World ex USA Index [net dividends]
Emerging Markets Stocks: +4.73% MSCI Emerging Markets Index [net dividends]
Global Real Estate Stocks: -0.81% S&P Global REIT Index [net dividends]
There is speculation in the national press that technology stocks, driven by AI, may be in a bubble. Many compare this to the tech bubble of the late 90s and early 2000s. The problem with spotting bubbles is that there’s no way to tell if something is a bubble until it pops. While tech stock valuations are high, unlike the tech bubble of the late 90s, most of today’s tech stocks are profitable. Our portfolios also have profitability filters that underweight or cut out unprofitable stocks to protect against bubbles. Overall, we are underweight tech stocks relative to the market. As always, it is a good idea to periodically review your risk level to make sure you are ok with a portfolio’s risk and return.
Bond Markets
Short-term interest rates generally decreased and long-term interest rates generally increased slightly. Inflation held steady at a 2.7% rate. The Federal Reserve cut interest rates again in December, but indicated future rate cuts were not guaranteed. Excepting the U.K., interest rates increased slightly abroad.
Bond Returns (Q4 2025)
U.S. Bond Market: +1.10% Bloomberg US Aggregate Bond Index
Global Bonds (excluding the U.S.): +0.52% Bloomberg Global Aggregate ex-USD Bond Index [hedged to USD]
Planning Perspective
2026 marks 40 years since Bill Prewitt summoned the courage to strike out on his own to practice this new thing called “fee-only financial planning.” He had been selling mutual funds and grew tired of sales quotas and the high-pressure environment. Fee-only financial planning, as a practice, had just been introduced with the creation of the National Association of Personal Financial Advisors (NAPFA) in 1983. Public awareness of it was non-existent and most people in the industry didn’t think it would work. The CFP® designation was just ten years old. Led by his conviction that advisors should be held to the fiduciary standard and hold the client’s best interest above their own, Bill rented a basement office at the corner of Meeting and Queen St. and went to work.
We are very proud to be celebrating 40 years in business, to be one of the first fee-only firms in the country, and that many of our early clients are still clients today. It wasn’t exactly easy in those early years. Bill jokes that he has the arrows sticking out of his back to prove it. But taking a chance on doing the right thing by clients laid the groundwork for change within the industry. It’s interesting to think about how our actions today might affect others down the road, even those we don’t know. My career may not have been possible without Bill taking that first step.
Personal Perspective
One of my son’s favorite books for me to read before bed is The Usborne Encyclopedia of World History. We’ve read it three or four times now. One practice of ancient civilizations that seems common, if not universal, is for wealthy rulers to bury themselves with riches and things they may need in the afterlife. The practice extended far beyond the well-known Pharaohs of Egypt and Shi Huangdi’s terracotta army. The ancient Celts in Europe, the Scythians of central Asia, and even the Aztecs in the Americas all did the same. It’s surprising there’s not a word for it. In all cases, this wealth would essentially be taken out of circulation. That is, until it inevitably got stolen. The concept that you can’t take it with you when you go would appear to be relatively new in the course of human history.
With that in mind, we’d like to review and discuss your goals this year, ensuring we make the most of the resources you have available. The first step is to cover our bases and make sure our retirement is sustainable and contingencies such as long-term care can be afforded. Goals beyond these can vary greatly from one person to another. Education, philanthropy, creating generational wealth, and travel top the list. We’ve even run projections on sailing around the world for a year or two. No matter what your goals are, we’d like to make them happen. We wish you a happy, healthy, and prosperous new year.
Myles B. Brandt, M.S., CFP®
Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio.
Market segment (index representation) as follows: US Stock Market (Russell 3000 Index), International Developed Stocks (MSCI World ex USA Index [net dividends]), Emerging Markets (MSCI Emerging Markets Index [net dividends]), Global Real Estate (S&P Global REIT Index [net dividends]), US Bond Market (Bloomberg US Aggregate Bond Index), and Global Bond Market ex US (Bloomberg Global Aggregate ex-USD Bond Index [hedged to USD]). S&P data © 2025
S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. Frank Russell Company is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. MSCI data © MSCI 2025, all rights reserved. Bloomberg data provided by Bloomberg.