We just wrapped up our end-of-year market update webinar, and I wanted to share our thoughts with those of you who couldn’t join. A replay will be available for those who missed it and posted online very soon. But in the meantime, a summary…

This has been a strong year in terms of market performance and economic growth. To recap where we’ve been, we started the year with a new administration that unveiled bolder than expected tariff plans. This sent the market into a tizzy, dropping into bear market territory within a matter of days, before rebounding and posting one of the strongest comebacks in market history. Economically? Companies are reporting growth and strengthening profits, consumers are spending alongside their healthy balance sheets, and we’re in the middle of a rate cutting cycle.

Now, where that puts us for portfolios… we plan on doing our annual rebalance around mid-January as we do each year. We do this to keep allocations trimmed properly and fine tune any adjustments based on where markets are at. Below are some of our current thoughts as a committee that will be finalized over the coming weeks as we head into portfolio changes:

• International this year has helped us improve our performance on the equity side. Europe up over 30% and international indices up nearly 30%, outperforming the U.S. The last time international has outperformed the U.S… 2017. We don’t foresee this carrying a multi-year outperformance by international markets compared to the U.S. We’re going to remain allocated to international markets, with some small rebalancing trades to reallocate some of this year’s international outperformance back to domestic holdings. The U.S. is still the powerhouse of innovation across the globe.
• U.S. equities have still been strong despite lagging to international, carried by… you guessed it, the Mag 7 once again. The largest companies in the world are carrying out the market’s performance this year (Apple, Amazon, Nvidia, Meta, Tesla, Google, and Microsoft). Though, earnings expectations and growth for the next 24 months show strong results coming from the rest of the market, not just the Mag 7. We plan to continue allocating more to the rest of the market, avoiding overconcentration on these 7 names.
• For fixed income, this is a year we’re finally seeing the benefit of higher interest rates and less volatility. 2022 was one of the worst years for fixed income in market history, and we’re still climbing out of that hole. But, with the Federal Reserve slowly lowering interest rates, we’ve benefited there.

Keep an eye out in early January for some additional insights and more specifics on portfolio changes. We wanted to share a little bit about where our minds are at and where we’re thinking for 2026…

In the meantime, hug a loved one, and we’re wishing everyone warmth from your team here at Adams Wealth Partners.

 

Opinions expressed in the attached article are those of the author/speaker and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. The forgoing is not a recommendation to buy or sell any individual security or any combination of securities.