The years sure do fly by! 2025 was no exception. A lot happened this year in the investing world (tariff tantrum, AI trade, AI bubble panic, ongoing Fed drama, and many more events). All told, it was a great year to be an investor, with most major indexes exceeding their long-term return expectations by meaningful margins.

The turning of the calendar always garners a lot of attention in the financial news media. You will be bombarded in the final days of 2025 by 2026 predictions, 2026 year-end price targets, best stocks for the new year lists, and top-10 lists for what to watch for in the new year. All these stories are attention grabbing but may not be all that useful. Here are a few things to keep in mind as we near the end of 2025 and prepare for another year of being long-term investors

Markets Don’t Celebrate New Years Eve

It’s true that calendar year ends do have some impact on markets (especially when it comes to effects of tax-related matters like capital gain management, loss harvesting, and cash raising for tax payments). However, keep in mind that markets don’t undergo some material change in character due to the flip to January 1st. What is true on New Year’s Eve will likely remain true in January! An entirely new investing playbook is not necessary for most investors.

Stick to Your Plan – Not the Press

2025 has been a trying year for investors, bringing us the lowest of lows (remember April’s tariff tantrum?) and the highest of highs (quite a few “mania moments” driven by the AI trade). Dramatic swings in either direction can be very challenging to deal with for investors. At times of highest uncertainty, it’s easy to get swayed by the media or other sources of influence.

Having a plan can help remove some of the emotion and help you stay on track. Before 2026 begins, revisit your plan. If you are still working, do you have a 12-month emergency account on hand? If you are retired, do you have ~3 years of needed distributions in cash/short-term fixed income? Does your allocation match your long-run return expectations? Are your actual allocations in line with your targets? Do you hold positions in excess of your pre-set concentration limit? Now is as good a time as any to take care of these items and set yourself up for a great start to 2026. With a solid plan in place, the daily gyrations on the market aren’t as impactful.

Seek Balance, Not Opinions

There is considerable talk about the path forward from markets from here in light of the staggering success of the AI trade in 2025. Debate rages on concerning many topics including – is it a bubble? Will value finally outperform growth? What sectors will do well? Will the US outpace international or lag as it did in 2025? What’s the path of the US dollar? What’s the path of rates” Who will be the Fed chair?

Commentators abound with their strongly held beliefs on all of these topics but the truth is – No One Knows! Everyone can have an opinion (many of them well founded and likely accurate) but the future has always been, and will always be, uncertain. Instead of looking for opinions, seek balance. Invest in diversification (sectors, regions, capitalizations, etc). Reduce concentrated positions (or remain aware of the risk). Allocate across asset classes. Balance tends to work in the long run.

Don’t Forget Year-End Tactics

Before you ring in the new year, don’t forget to take care of some year-end tactical items including (but not limited to): funding employer plans up to 2025 max, harvesting losses (and/or taking gains if your tax situation allows), donating appreciated stock, doubling-up on SALT taxes (if it makes sense with your tax situation), processing RMDs, and/or making gifts up to the 2025 gifting exclusion if you so choose.

If you are a client and wish to discuss your specific items with us, please reach out (but also rest assured we have things on your list handled!)

Give Thanks

Most importantly, before moving on to 2026, take a moment to appreciate all the many blessings in your life. It’s easy for this column to focus on the weekly movements in markets (that is what I’m here to discuss after all!). But let’s never forget the point of investing – which is to allow yourself and others you care about to live the life you desire now and in the future. 2025 has given us all the ability to continue to do just that – and for that, I give thanks.

Wishing you and your families a wonderful holiday season. It’s a great time to pause, reflect, and put down our devices! To that end, Friday Five won’t be published over the holidays (barring some major event that needs to be discussed). I’ll see you back here on January 9th and we’ll get to work on a new year.

Onward we go,