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 feels appropriate. The US and international markets had many headline concerns. Headlines included the following: 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. Stocks posted positive returns in the US and interest rates fell, causing bond valuations to increase, complementing stock market growth. International markets provided robust returns outpacing US stocks. The combination of positive returns in the US and internationally locked in the third year of double-digit performance for those who invested globally. This solidified a strong year for investors, despite the markets sliding in 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. Artificial Intelligence (AI) sector stocks led the way with investors enthusiastic about the prospects of a 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, the price performance of bonds further enhanced portfolio returns.
Gold and silver valuations soared for 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 a change in margin requirements by the Chicago Mercantile Exchange Group (CME). The CME regulates and operates the gold and silver trading exchanges. The change increased margin requirements for investors to lend or borrow against gold and silver ownership. The new margin regulations, coupled with investors taking profits, led to a steep decline in gold and silver prices at the end of the 4th quarter.
International markets leaped past the US. Performance internationally excelled because of a weaker dollar plus investors repositioned 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. At Renew Family Wealth we 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 partnered with us at Renew Family Wealth in 2025. We are grateful for the opportunity to serve you in 2026 and beyond!
Sincerely,
Scott Miller
