Reasons to Be Thankful This Holiday Season

As the holiday season begins, it's the perfect time to pause and appreciate what we have, both in our personal and financial lives. This is particularly important since investors tend to focus on what could go wrong rather than what has gone right. With markets performing well, let's reflect on the past year to gain perspective as we look ahead to 2026.

Financial markets have delivered strong returns this year. The S&P 500 has experienced a double-digit return with dividends while bonds have returned approximately 7% year-to-date. International stocks have outperformed U.S. stocks for the first time in many years. Many diversified portfolios have benefited from this broad-based performance.¹

Here are three reasons to be thankful as an investor, and what they mean for your financial plan in the year ahead.

We're in the Fourth Year of a Bull Market

First, we can be grateful that financial markets have performed well this year despite occasional stumbles. This bull market cycle began after the market bottom in October 2022 and is now entering its fourth year.

While past performance is no guarantee of future results, history shows that bull markets tend to last much longer than bear markets - often five to ten years or more. This resilience underscores an important principle: trying to time markets around short-term events is difficult and can be counterproductive.

Remember the April tariff announcement? Markets fell close to bear market levels, only to rebound quickly and rise to new all-time highs. Investors who remained disciplined were rewarded, while those who reacted to headlines may have missed opportunities.

Inflation Has Improved and the Fed Is Cutting Rates

Second, we can be grateful that inflation has improved, even if progress has been slower than many would prefer. Prices have risen about 3% over the past year, which continues to be a challenge for households.

However, from an investment standpoint, fears of runaway inflation have faded. This has allowed the Fed to begin cutting interest rates after keeping them at restrictive levels for most of the year. The Fed is also responding to a job market that has been weakening since the summer.

Historically, lower rates benefit both stocks and bonds by reducing borrowing costs while making existing bonds with higher interest rates more valuable. While inflation and interest rates will remain important factors for markets, the worst fears appear to be behind us.

Asset Allocation Helps Manage Risk While Capturing Opportunities

Finally, we should appreciate the importance of ongoing risk management and proper asset allocation in your portfolio. The year ahead will likely bring new sources of uncertainty, as every year does.

Questions about artificial intelligence will persist in 2026. It's natural that the effect on stock prices is difficult to predict given the transformative nature of the technology, similar to how the internet revolution unfolded beginning in the mid-1990s. Political volatility is also likely to continue with ongoing discussions around tariffs, geopolitical concerns, and the national debt.

Recent history underscores that reacting to these events is not only counterproductive but can derail financial plans. Your portfolio is positioned to benefit from innovation and growth while managing risks.

The holiday season is an ideal time to reflect on the many reasons to be thankful and to review your portfolio. If your financial situation or objectives have shifted, or if you have questions about how these market conditions affect your specific circumstances, please don't hesitate to reach out. I'm here to help ensure your portfolio continues to support your long-term goals.

Disclosure: Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

All investing involves risk including loss of principal. No strategy assures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.

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¹ Source: Clearnomics. Indexes referenced are S&P 500, Bloomberg US Agg Bond Index, MSCI ACWI ex-US. Data as of November 19, 2025.