The $trategist - Recap of 2025 & Onward Into 2026

Q4 2025

Recap of 2025 & Onward Into 2026

Grant Beck, CIMA®

Happy New Year to you and your families from all of us at Liberty. We hope you had a great holiday season! As we move into 2026, we wanted to recap some of the market highlights from 2025 and talk about what we are looking for in the new year. The market headlines last year were dominated by stories about AI, tariffs, precious metals, and renewed volatility. Underneath these headlines, we saw the S&P 500 return double-digit gains for the third year in a row! To put this into perspective, it is only the third time this has happened since World War II. While that makes it seem like a rare occurrence, it is even more eye-catching when we consider the other three occurrences between 1995-99 (5 years of double-digit returns led to multiple overlapping three-year periods). Much of this growth was fueled by returns in companies in and around the AI space as investors tried to get a piece of the projected revenue.

Market fluctuations throughout the year coincided heavily with global trade talks. The largest move of the year came in April with the announcement of global tariffs by the US. As we moved through the summer, and tariffs were delayed or trade deals were made, the markets rebounded. During all of this, investors saw growth and opportunity in international markets. Moving away from the trend of the past few years, developed international and emerging stocks outperformed their US counterparts. This served as a good reminder of the benefits of a diversified global portfolio and the benefit of investing across the capitalization spectrum.

As we move into the new year, it is easy to be worried about the markets given some of the numbers we highlighted here. However, we caution jumping to conclusions or being afraid of a market correction. The markets and economy seem to be in a strong position. Inflation has continued to slow, and our best guess is that interest rates will continue to move downwards throughout 2026. And while the labor market did show signs of slowing towards the end of summer and early fall, there have been some positive signs towards the end of the year. Our expectations for the year would be cautiously optimistic but certainly not expecting the returns we have seen recently.

Overall, while we do not think this is the end of this bull run, it is a good time to take advantage of the growth we have experienced over the last few years and rebalance back towards longterm allocation targets. We remain committed to our long-term value-based approach and global diversification as this has proven to be the best approach over longer time periods. We look forward to meeting with all of you in the new year!

Planning Notes

June Schroeder, CFP Board Emeritus®

Social Security

The Social Security increase of 2.8% is higher than the average of 2.3% over the past 16 years. The average recipient gets about $2k/month. The Medicare part B premium increase will take back about one-third of the average Social Security recipients raise.

Buy Now Pay Later (BNPL) Plans

Buy Now Pay Later (BNPL) plans are evolving. Longer payment plans (like what is happening to car loans) and reporting to credit bureaus are new, which can be good news or bad news for consumers. Even more questionable is BNPL options for food & delivery of fast food allowing biweekly payments! (Some people choose easy over smart.)

Speaking of easy = online shopping, Black Friday shoppers spent a record $11.8 billion, up over 9% from 2024. Cyber Monday consumers spent over $14 billion, racking up $16 million every minute during peak hours of 8 p.m. to 10 p.m.! Cyber Week (Thanksgiving to Cyber Monday) brought in $44 billion online, up 7.7% year over year! Now, the credit card bills start coming in January.

Fraud Watch: Vigilance is Key!

Once again, a reminder— stop, think, use common sense. The heightened shopping season has ended but not the fraudsters. I’ve gotten several scam emails and texts with messages like “sales receipt attached” or “the following charge has been added to your account” or “your package cannot be delivered without more information.”

Don’t bite! Don’t click or call. If you need to verify because you are waiting for a package or have made a recent charge on a familiar site, call the store or your credit card company directly using their phone number or email address, not the one in the text or email.

I’ll have more on fraud and scams in an upcoming Notes From Elm Grove that might even involve your TV!

Client Alerts

Shannon Nook, FPQP ™

LFG Winter/Spring Hours

8:30-5:30 Mon-Thurs

8:30-5:00 Fridays

Closed: January 19, April 3, May 25

Retirement Funds: Add a Few Extra Dollars

There is still time to add deposits to IRA accounts, including Roths, before the April 15th tax deadline. Limits are $7,000 annually and $8,000 for those over age 50. Income limitations may apply, so check with us or your tax preparer with details on your 2025 income.

Liberty Tax Prep Clients

Look for an email or snail mail letter from Liberty in early February with instructions about your 2025 tax season preparation and data gathering. Liberty receives your Schwab 1099s and 1099- Rs for the accounts we manage, plus any corrections, which we hope will be final by February 18th. There is no need for you to provide those copies to us.

Featured Artist Meri Berghauer

Meri Berghauer has been an integral part of the Milwaukee art scene for over 40 years, bringing creativity and passion to every project. With a solid foundation in art education and extensive professional experience, her career spans teaching from grade school to college, and licensing novelty candy products for major studios such as Disney, Universal Studios, and Paramount as well as illustrating children’s books— including her own upcoming release.

Her artistic repertoire includes wildlife fine art, product and graphic design, and custom pet portraits. She is thriving at her unique gallery in West Allis, Art ‘N Oddities, which proudly stands as one of the most unusual and vibrant galleries in the area.

Our connection was serendipitous—she came to Liberty Financial Group with a neighbor for a notary service, and we discovered her incredible talent. A must see, please visit her gallery or make an appointment to see her works on our Liberty walls. She is a true visionary!

Congratulations, Shannon!

Congratulations to Shannon Nook! She has served on the board of the Financial Planning Association of Wisconsin for over 10 years and has now been elected to lead the organization as President! Her passion for financial literacy drives her to guide pro bono work to lead others to financial wellness.