Posted: February 6, 2026 | by: Thomas F. McKeon, CFA
In this issue: From the Cio's Desk, Review and Outlook for 2026, Model Portfolio Performance, Expectations for the Economy, "The Rot in Private Equity" and 2026 Grammy "Best New Artist" Award Winner Olivia Dean sings her hit "Man I Need" and Closing Thoughts.
The equity markets ended the year near all-time highs, capping off a three-year run that saw the S&P 500 gain more than 75%. Global equity markets were not far behind. The money being thrown at anything related to AI and the investor enthusiasm around that is leading the charge for US stocks. Valuations are extended. Caution is warranted here. Markets don’t appreciate forever without an occasional downturn and extreme valuations (AI stocks) typically do not lead to superior returns.
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The equity markets delivered solid returns for the quarter with and for the full calendar year of 2025. The bellwether US Equity index--the S&P 500--delivered a total return for the year of almost 18%...nearly double the historic average. The global equity markets excluding exposure to the US returned a gaudy 34%, almost doubling the S&P 500. This fact all by itself is a powerful rationale for diversifying away from our home country and including market exposures to other developed countries and companies.
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Our investment philosophy is organized around the simple principle of taking what the market gives us. With a global allocation to stocks, bonds, preferred stocks, real estate and cash and broad diversification through the use of Exchange Traded Funds (ETFs) we believe our portfolios offer clients the best return to risk tradeoff with the lowest costs.
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Buyout firms have struggled to sell companies they own and have instead found a workaround to get cash back to clients: Selling the companies to themselves. From the New York Times.
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Olivia Dean singing her hit “Man I Need” on the BBC’s New Year’s Eve concert hosted by Jools Holland. She just won the best new artist award at this year’s Grammy’s.
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In the history of financial services there have never been more ways to invest: more banks and brokerages (physical and online), more investments and market exposures, more products and packaging (stocks, bonds, mutual funds, ETFs, insurance products, private investments) and lack of sources of information: legitimate and otherwise.
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