I wish you WELL as we round out the year and make the turn into 2026.

ANOTHER good year for the financial markets.  One of these days, we will have a more difficult run, but we will certainly take a repeat of the last two years:  A Goldilocks scenario – Everything is “not too hot and not too cold”.  And there exists a wall of worry that the market has to climb, which is a healthy thing. Topics that have been dominating that “wall” included tariffs, inflation, overall US concerns, and “AI”.  When we get to where there are no worries and no one thinking that the markets can fall, that’s when we will be at the top.  From everything I read of late (and I read a lot), it sorta feels like most every market prognosticator seems to think things will continue nicely upward. They acknowledge the elevated levels of the markets and some other signs that can generally be construed as warning signs, but they brush all that off.  “We are headed upward!” 

I honestly don’t have a conviction right now and that’s okay with me. There is no crystal ball.  As most everyone knows, things can turn ugly in a very short amount of time. I’ve also said many times that, by January 31 most years, we can toss the majority of Stock Market Outlooks.  Our goal remains to manage money through uncertainty and manage the downside risks as much as looking for upside appreciation.  This past year, we were particularly happy with that “total picture”.  Alas, January begins a new year and last year is, well, last year.  The calendar begins anew.

The official Merriam-Webster WORD OF THE YEAR for 2025 was not “AI”, but it was a word that is associated with AI.  As far as I am concerned, it might as well have been AI.  Everywhere we look, it is discussed. This weekend’s Wall Street Journal, as just an example, contained multiple AI articles and references to it throughout.  I have no doubt that much of the journalism we read IS written by computer.  I grew up professionally in the computer world. (Seems SO long ago that I worked and loved my time with IBM)  As pervasive as AI has become in our culture, we need to remind ourselves that AI is computers cranking out computations based on what is AVAILABLE to them.  We have come a long way.  But the voice that sounds like a person is not a person.  It is a computer blasting through data and then composed into a voice of output rather than, of old days, a report on a printer.  I don’t know why I say all of this. . .but just dribbling on.  It is the future, no doubt.  But I suppose this equates to why I still suggest caution as it relates to a computer guiding our “everything”.  But certainly both useful and HELPFUL to us all – more and more.

Almost all markets were up in 2025.  The prices for AI stocks went from expensive to silly.  However, there was more of a participation by other markets and sectors, which was very healthy.  Some believe it will continue and I don’t object.

I will abstain from significant stock market talk in this message, but I will mention a theme at hand:  Increasing exposure to International investments.  The degree of optimal exposure is different for various clients, but this is a topic.  For a decade, we have been light on holdings outside the US and that has generally been a GOOD thing.  However, by almost every measure the US market is overvalued and this “cycle” of US outperformance has progressed far longer than historically typical. We are raising our exposure modestly – just to make sure we participate in the opportunities that exist outside the United States.  Still high-quality, but nevertheless we see it as a good time to make sure we own some of the quality from abroad along with quality here.  These will be individual discussions along the way.

With the new year, I am always grateful for many blessings and I do not take things for granted.  I say prayers (literally) for my friends and clients and family members all by name. . .and I always hope for good health and peaceful good times ahead for you.  Turbulence is never far, but challenges help us to more greatly appreciate the blessings.  Does that sound right?  Difficult to say when we are amidst the “challenges”. . . but it really does ring true.  I feel blessed to have the role that I play in the financial lives (and non-financial lives) of my friends and clients. I say a word of thanks.

I could keep going.  But alas, we all have plenty to read.  I will keep it to saying that I look forward to the reviews and catch-ups and to generally being in touch.

We continue to be here for “life” as it relates to financial planning and navigation of the times, along with investment oversight and management.  We relish the role that we play.  Renee and Walter and possibly an additional person on the team in 2026 – we are here to advise, suggest, and help with it all.  Please don’t hesitate to let us help you in any way that we can.

May you have an uncommonly good year ahead with my best wishes and prayers for health and peace and many blessings – even (and especially) in the simple things.

With best regards,

  Key