Wall of Worry
“Therefore, do not be anxious about tomorrow, for tomorrow will be anxious for itself. Sufficient for the day is its own trouble.” Matthew 6:34
2025 is behind us, a new year has begun. Reflecting on the 4th quarter of 2025 the bible verse noted above is quite appropriate. The US and international markets had many headline concerns. Some of the headlines were about the longest US government shutdown in history, unemployment edging higher, tariff trade wars, a massive deflation of the US dollar, low consumer confidence, and international conflicts. Despite these issues markets continued to advance in the 4th quarter of 2025. Stock and bond values posted positive returns. Diversified portfolios of stocks and bonds delivered strong returns. As interest rates fell, bond valuations increased, driving additional returns to stock market growth. International markets provided robust returns out pacing the US markets. The combination of positive market returns in the 4th quarter locked in the third year of double-digit market returns. This solidified a strong year for investors, despite the markets sliding the last 4 trading days of the year.
Gains in the US equity markets were reinforced by a robust and expanding economy. Corporate earnings continued to excel. AI (Artificial Intelligence) sector stocks led the way with investors enthusiastic about the prospects of the new technology revolution. The Federal Reserve unleashed 3 interest rate cuts, one for each month of the quarter. The result, lower interest rates that further opened the door for access to consumer and commercial credit for purchasing power. Fixed Income (Bond) performance benefited from lower interest rates. As interest rates drop, existing bonds gained value versus new issued bonds with lower interest rates. Thus, price performance of bonds further enhanced portfolio returns.
Gold and silver valuations soared most of this quarter with investors seeking inflation protection and a safe haven against geopolitical worries. However, the year ended with a massive sell-off in gold and silver due to the CME (Chicago Mercantile Exchange) Group. They regulate and operate the gold and silver exchanges. This sell-off increased margin requirements for investors to lend or borrow against gold and silver ownership. When coupled with investors taking profits, this led to the steep price declines in gold and silver to end the year.
International markets leaped past the US. Performance internationally excelled because of a weaker dollar, and investors repositioning assets from the US to international markets. Consumer spending remained strong as rate cuts in the Euro Zone continued.
Emerging market stocks benefited from lower interest rates in the US, which provided Emerging Market central banks with the maneuverability to lower rates in sequence with the Federal Reserve. China’s technology sector surged this quarter bolstering Emerging Market returns.
Though there were many reasons for investor concerns in the 4th quarter of 2025, the markets overcame the “Wall of Worry” prospering forward despite the news. Historically news may make or break the markets, however managing risk and diversification alleviates making knee jerk reactions. We at Renew Family Wealth apply asset allocation and diversification in line with our investors risk tolerance to assist our clients in weathering the storms associated with short-term headline risk. If you are concerned about how your investments are influenced by the rolling tides of market volatility and are seeking guidance, please do not hesitate to contact us for an evaluation of your situation and circumstances. We would be joyous to serve you and your family.
Thank you to all who partner with us at Renew Family Wealth. We are grateful for the opportunity to serve you in 2026 and beyond.
Sincerely,
Scott Miller
