Daily Commentary

MarketMinder’s View: ‘Tis the season for year-end financial checklists, and this one casts a refreshingly wide net beyond the standard take your required minimum distribution, max out your tax-deferred retirement account contributions and make your tax-deductible charitable contributions. Those are all good things! But we like this list because it is less about scrambling on 2025 things and more about starting 2026 on a bright note. Checking your accounts’ listed beneficiaries is a big one: “If you’ve had a marriage, divorce or birth in the family this year, an outdated beneficiary form can cause a legal nightmare later.” Popping into your brokerage firm’s online portal now can save your heirs a lot of time and heartache later. Adjusting your regular retirement account contributions is another good one, as contribution limits are going up. Even if you aren’t in a position to take advantage of this, upping your contributions with “a change so small you probably won’t even feel it” is a viable place to start—and if you have young people in your life, drill this into them. Bolstering security on your personal accounts is another biggie: “Setting up alerts and two-factor authentication on your primary banking and investment accounts is the digital equivalent of dead-bolting your front door. Set your security alerts on your bank and credit card accounts to the minimum setting allowed by the institution.” Cybercriminals and other fraudsters are relentless, so it is always good to preemptively protect yourself and your assets.

MarketMinder’s View: This is a timely example of a timeless concept: Sentiment is at best coincidental to stock returns, not predictive. After a very tough multiyear stretch, Emerging Markets (EM) stocks entered 2025 far out of favor. But now, after a year of big returns, everyone is piling in. “It’s a turnaround few saw coming. Until recently, investors were avoiding the asset class after years of weak returns and fearful of a U.S. trade war. Money managers found it tough pitching it to clients, while hedge funds said they saw the best opportunities in betting against emerging markets. ‘2025 was an inflection point,’ said [one EM analyst]. ‘The question a year ago was whether emerging markets were even investable, but that’s no longer a query we receive.’” Yep, instead, fund flows are up, with money pouring into EM stocks and bonds to chase returns and yields. Now, we think this piece goes too far in boosting the belief higher flows will drive higher returns from here. That isn’t how it works. Market transactions (as any) are dual-sided, with a buyer and seller on either end, so money going in and out effectively cancels. When international investors are net buyers, it means domestic investors are net sellers. Moreover, while we aren’t yet forecasting 2026, this piece makes it clear investors will need to consider the risk sentiment gets too hot toward EM after a big year.

MarketMinder’s View: This long-ish piece provides a broad look at America’s economy in 2025, in terms of both perception and reality. Many of the observations play into some of this year’s big talking points, like the allegedly K-shaped economy and AI’s supposed responsibility for resilient business investment. We disagree with a lot of it (and have written about many of these items), but the article also indirectly highlights a broader point. (It also includes some rather charged political discussion, so a friendly reminder that MarketMinder is politically agnostic, assessing developments solely for their potential market and/or economic effects.) That point: While forecasts imply GDP growth slowed this year and there are some obvious soft pockets, the US economy performed better than expected this year. That, friends, is all stocks need. Not perfect. Not great. Not even very good. A little (or a lot) better than feared is plenty. To wit: “That mixed picture is far better than the dire forecasts of last spring, when many economists warned that President Trump’s tariffs would lead to runaway inflation, a recession — or both.” Bingo! Stocks move on the gap between reality and expectations, and the latter slipped into the gutter following President Donald Trump’s Liberation Day tariff announcement. Yet widespread calls for recession overlooked global commerce’s ability to work around and/or shoulder tariffs’ added costs—the key reason behind America’s economic resilience this year. This article documents a lot of that, including how tariff delays bought companies time to adjust their supply chains and healthy profit margins allowed several to absorb tariffs instead of passing them to customers. As the article aptly acknowledges early on, a “resilient” economy may not always be a “good” one. But stock markets overwhelmingly showed resilience can be very bullish this year.