Better Options for Login Security
December 1, 2025
The Benefits of Roth Conversions for You and Your Loved Ones
February 1, 2026
By Brett Freese
Happy New Year!
2025 was a wonderful year for many of our clients, a very challenging year for other clients, but for most of our clients, it was somewhere in between. If you are reading these words, then your story is still being written, and 2026 is full of blank pages.
Instead of saying “one day” or “tomorrow, I will start working towards my current dreams and priorities,” start today by creating new habits that stretch you, but are achievable, and build confidence and resilience. You know we are here to help guide you in reaching your financial priorities, but health and relationships also require intentionality. Since you have hired us to help you optimize your financial success, it may be worth looking into working with a fitness or health coach and even a relationship or career coach. The day I realized that most, if not all, Fortune 500 Company CEOs have multiple business and personal coaches is the day I had the freedom from “self-made” to a much healthier mindset of a successful “work-in-progress” with others. You matter, and today matters.
Let your priorities lead your actions, and let your actions lead your feelings. We are praying for a great 2026 for you and those you love and care for.
Stock Market in 2025: Aside from a painful pullback in early April on trade uncertainty and a government shutdown later in the year, the S&P 500 had a very good 2025 with double-digit returns and hit a new all-time high during the trading day on December 26, 2025, at a level of 6945.77
Economic & Investment Highlights:
- Artificial Intelligence (AI) dominated the main investment theme of 2025. Semiconductor, data centers, and sources of the immense amount of energy needed to power the AI advancement.
- The Federal Reserve (Fed): The Fed Chairman Powell and most of the voting members of the Federal Open Market Committee (FOMC) moved to a more measured approach to lowering interest rates to be less restrictive on the economy. They announced a few decreases since September and will likely be content with small decreases in rates (if any) in early 2026. The Fed has indicated that the path to more rate decreases in 2026 will be data-dependent. Always keep in mind that the Federal Reserve has a dual mandate to achieve both stable prices and maximum sustainable employment.
- Global Outperformance: Diversification outside of the US was profitable in 2025, with International Equities outperforming US Equities. For example, U.S. Large Value Stocks increased by 14.94%, whereas Foreign Large Value Stocks rose by 38.53%.
- Resilient Consumer: Low unemployment, strong household balance sheets, and solid stock market gains provided strong spending levels.
2026 Challenges and things to watch:
- Mortgage Rates: To repeat what was stated in the October newsletter: “When it comes to the real estate sector, the Housing and Banking industries continue to see a ‘wait and see’ approach by consumers when it comes to purchasing a home and/or refinancing a currently owned home. Many are waiting on the Fed to lower interest rates, but there is a little bit of a misunderstanding of what a Fed rate increase or decrease does to mortgage rates. The Fed changes short-term interest rates, whereas mortgage rates are more tied to longer-term interest rates. It is possible that short-term rates can go down, but longer-term rates could stay the same or even go up. It is all based on short-term and long-term expectations of both economic growth and inflation.”
- Inflation: Increased prices on consumer goods and services continue to be more benign than critics have projected. However, the average consumer would say inflation feels high, but it is more about prices not coming down from high inflation a few years ago than from current inflationary numbers in the economy.
- “One Big Beautiful Bill”: The final Bill was passed early in July of 2025. Please see our September Insight on the One Bill Beautiful Bill Act Planning Strategies.
- Labor Market: The Job market has shown some signs of weakening leading into 2026, but unemployment remains historically low.
- Geopolitical Tensions: Navigating the complexities of regions and countries seems overwhelming at times and challenging to keep track of the status and implications of each action or inaction. As always, the interaction between China and the US tops the watch list.
- Fiscal Spending Pressures: Persistent US government spending deficits could crowd out private investment, therefore making the cost of raising capital more expensive for businesses and individuals.
Historical Stock Market Declines:
Market declines and inclines rarely look the same or even feel the same, but they do happen, and the ups and downs are a part of the process. It is important to have a plan/strategy so emotions don’t dictate buying or selling.
A 5% or greater loss occurs about 3 times a year
A 10% or greater loss occurs about once a year
A 15% or greater loss occurs about once every 2 years
A 20% or greater loss occurs about once every 3.5 years
Please know that when stock prices go down, the “market collapse gurus” receive the most airtime. Likewise, when stock prices go up, all the “bull market gurus” talk about how the market will continue to be up BIG. Please know that most “gurus” are great with hindsight to justify how important it is to have their voice heard.
Market Scorecard for the last 13 weeks ending 12/31/2025:
US Equities:
+ 2.66% S&P 500 (Index of the largest US publicly traded companies)
+ 0.52% Large Cap Growth – Morningstar Category
+ 3.14% Large Cap Value – Morningstar Category
+ 1.22% Russell 2000 Growth (Index of Small-cap growth US publicly traded companies)
+ 3.26% Russell 2000 Value (Index of Small-cap value US publicly traded companies)
International Equities:
+ 0.77% Foreign Large Growth – Morningstar Category
+ 6.54% Foreign Large Value – Morningstar Category
– 0.86% Foreign Small/Mid Growth – Morningstar Category
+ 4.13% Foreign Small/Mid Value – Morningstar Category
Bonds:
+ 0.90% U.S. Aggregate Bond (Index representing intermediate-term investment-grade bonds in the U.S.)
+ 0.79% Corporate Bond – Morningstar Category
+ 1.13% Short Government – Morningstar Category
+ 1.47% Muni National Bond Intermediate Index – Morningstar Category
Other:
+ 12.22% Gold Price
– 23.48% Bitcoin
+ 4.40% Commodities Broad Basket – Morningstar Category
Current Annual Money Market Rates ending 12/29/2025:
3.58% Schwab Value Money Market
3.47% Schwab Treasury Money Market
Market Indicators:
Inflation:
3.01% as of September (up 0.31% from 2.70% in July)
Unemployment:
4.6% as of November (up 0.3% from 4.3% in August 2025)
Fed Funds Target Rate:
3.50% – 3.75% as of 12/29 (down 0.50% from 09/29/25)
Suggested Next Steps:
- Understand that market cycles are normal. The markets go up and down in mostly unpredictable directions and amounts. Many times, the ups and downs of investments seem to make sense only after they happen; however, market prediction is very difficult. (i.e., the next stock market crash has been predicted every year since 2008).
- Your investments are just one factor in the success of your life, money, and purpose. Make sure that you are confident in your full financial plan, so you can successfully have an amazing ROL (Return on Life).
- Your investment allocation and diversification are important factors in both risk management and future returns. Therefore, if you have questions about your investment plan, please schedule a phone or in-person meeting with your TrustWell Financial Advisor(s).
