Change

2025 will go down as the Year of Perpetual Change. Throughout the year, consumers and corporations were forced to digest an onslaught of uncertainty stemming from significant shifts in federal policy.

In (mostly) chronological order, these changes included:

·         The creation of the Department of Government Efficiency (DOGE)

·         The introduction of a high tariff regime

·         A subsequent move to a more modest tariff strategy

·         Changes in immigration policy

·         Questions on Federal Reserve independence

·         The “business-fication” of government policy

·         A lengthy government shutdown

All the while, U.S. and global economies started to feel the impact of the next great technological wave – artificial intelligence (AI).

As we enter 2026 the pace of change certainly does not appear to be slowing.  It is likely to be another volatile year, with unexpected developments.  I expect that the companies in client portfolios will continue to monitor and adapt to change, providing reasonable investment returns.  This ability to adapt to a changing environment is the reason we want continued equity exposure.

Interest rates are likely to remain moderate, as Jerome Powell’s term as Federal Reserve Chairman ends.  However, inflation remains a longer-term concern, so we will be keeping bond maturities short.

For our part, we plan to stay the course, investing in quality companies that show promise for the future.  Please call to discuss issues specific to your portfolio, or any changes that should affect your investment asset allocation.

Best wishes for a happy and healthy New Year.