January always feels like a reset. New calendars, fresh planners, and maybe a renewed promise to use the treadmill that has been quietly collecting dust since last winter. It is also a great time to pause, reflect, and look back at what the markets did last year before the year fully gets moving.
Stocks wrapped up another strong year in 2025, marking the third year in a row of solid gains. That outcome is especially notable given the many factors’ investors were watching closely throughout the year, including tariffs, inflation trends, government spending, and market valuations. Even with those concerns in the background, markets continued to move forward. Here are a few key takeaways from the year:
Markets tend to reward patience
Each new year brings a range of opinions about where markets are headed. While short-term uncertainty is always part of investing, history shows that markets have risen far more often than they have fallen. Since 1980, the S&P 500 has finished higher in roughly three out of every four years. That long-term pattern is a helpful reminder that staying invested has historically been more rewarding than trying to time short-term moves.
Strong businesses support strong markets
Company profits remain a major driver of stock performance. In 2025, S&P 500 companies grew earnings at a healthy, double-digit pace, with technology companies leading the way. When businesses are growing and innovating, markets tend to reflect that progress over time.
Policy changes matter more than political headlines
Market movement last spring was largely driven by policy decisions that directly affected company profitability, particularly tariffs. Once those policies eased, markets were able to regain momentum. While political events are always part of the backdrop, markets tend to focus more on how policies impact economic and corporate fundamentals.
Short-term pullbacks are part of long-term progress
Even in strong years, markets can experience meaningful dips along the way. In 2025, the S&P 500 was down nearly 19 percent from its high at one point in April yet still finished the year up more than 16 percent. Ups and downs often coexist, and keeping a long-term perspective helps prevent short-term volatility from knocking a plan off track. This is a helpful reminder that temporary dips are a normal part of investing and do not necessarily change the long-term picture.
Lower interest rates helped both stocks and bonds
As inflation moderated and interest rates moved lower, both stock and bond markets benefited. Bonds had a strong year, and lower rates also supported stock prices. While valuations are often discussed, they are not reliable predictors of what will happen from one year to the next.
As we move into 2026, some familiar themes remain. Policy discussions and election cycles may lead to periods of market movement, which is a normal part of investing. At the same time, interest rate cuts, continued economic growth, and significant investment in new technologies provide a supportive backdrop for the year ahead.
Much like easing back into routines after the holidays, investing works best when approached with consistency and perspective. A well-built plan is designed to carry you through all seasons. The goal is not to predict every snowstorm, but to be confident your plan is built to handle whatever weather comes your way.
Thank you for your continued trust and partnership.