As we welcome the new year, many of us are used to setting resolutions-goals we strive to achieve with determination and often, pressure. But what if this year, we approached things a little differently? Instead of rigid resolutions, let’s focus on setting intentions.

Intentions are about cultivating a mindset, embracing progress over perfection, and allowing flexibility as life unfolds. They invite growth and alignment with our values, helping us stay connected to what truly matters, rather than ticking off a to-do list.

Here’s to a year of meaningful progress and positive change!

Jeff Wetta, RPS and Dustin Jackson, CFP® RICP®
Managing Partners

Your Market Update

Markets down in December- ready for the New Year

As we conclude the month of December, we reflect upon a period marked by fluctuations in equity markets, several economic developments, and cautious optimism toward the New Year.

Equity markets exhibited a blend of positive year-to-date results combined with an uptick in volatility December. the CBOE Volatility Index (the VIX) closed on the 30th at 17.0, which was a bit above the year’s average of 15.3. Generally, a VIX reading of 20.0 or below is considered stable. Among leading indices, the month ended with mixed results; the S&P 500 was down 1.9%, the tech-heavy Nasdaq was up 1.5%, and the slower-growing companies of the Do Jones Industrials were down 5.2% as of December 30th. Small cap stocks, as represented by the Russell 2000 index, were down 8.6%, thus offsetting the excitement in November among small and mid-cap names.

On a broader scale, 2024 saw commendable growth, with the S&P 500 up 25.8%, the Nasdaq up 26.9%, and the Dow Jones Industrials up 15.1% year-to-date as of December 30th. The Russell 2000, however, trailed behind with a gain of 11.3%. In contrast, fixed income markets proved disappointing. The Bloomberg US Aggregate Bond Index finished up only 1.05% for the year following a 2.0% decline in December as of the 30th.

December economic data

The Bureau of Labor Statistics (BLS) released the November CPI report on December 11th and in it was reported that headline CPI rose 2.7%, up from the preceding month’s 2.6%. This CPI data preceded a Federal Reserve meeting on December 18th during which they cut the federal funds rate by 25 bps to between 4.25% and 4.50%. However, subsequently hawkish statements from the Fed projected a cautious approach to further rate cuts over the next two years. Now it’s predicted that there will be two cuts in 2025 and two cuts in 2026. The market’s reaction to this news was not positive and this downward trend continued through the last two weeks of the month.

The BLS also reported unemployment numbers on December 6th . November job growth came in strong with 227,000 new jobs, versus just 12,000 new jobs in October. The market viewed these numbers as a preview to Fed hawkishness, with little current worry about a hard landing economic scenario.

Earnings – the big driver for 2025

Corporate earnings continue to be a positive highlight, with an anticipated growth of 11% for the year. Projections for 2025 are closer to 14.8%. This strong estimate is well above the 10-year average of 8.0% (from 2014 to 2023) and denotes both opportunities and potential challenges. Strong earnings growth historically propels markets upward; however, it also sets a high benchmark that necessitates careful navigation.

On the horizon – inflation and tariffs

Inflation, although somewhat stabilized in the higher 2% range, remains a focal point for market implications. We believe that levels are likely to slowly tick down rather than increase despite recent news. As for past price increases, these are expected to stay but should not be a detriment to the market if they have plateaued.

The impact of tariffs on the economy is uncertain. Widespread adoption across all imports will likely involve congressional approval, making high-cost tariffs less probable. As the year unfolds, tariffs will certainly be something we watch and analyze closely.

To sum up

In summary, as we enter 2025, we remain optimistic about continued market performance, supported by a pro-business administration conducive to corporate profitability. Our diversified portfolios are strategically positioned to adapt to varied economic scenarios, including potential prolonged rate environments.

We saw the market volatility that began this summer slowly return in December and we continue to view it as a normal part of market behavior. Not to mention volatility can present strategic buying opportunities if well-positioned. Projected corporate earnings for 2025 and already relatively-full equity valuations are another item we will carefully analyze over the coming months, making sure to take care as we construct our portfolios. Lastly, with anticipated downward adjustments in interest rates, we also recognize opportunities within higher-yielding alternative investments for fixed income investors.

Overall, our analysis remains grounded in a steadfast commitment to monitoring evolving economic indicators, market events, and company earnings as we usher in the New Year.

Sevasti Balafas, CFA, CPWA®
CEO & Founder
GoalVest Advisory

Sources: JP Morgan Asset Management, Bureau of Economic Analysis, Bureau of Labor Statistics, Morningstar, Factset, Slickcharts, Yahoo Finance, and Ycharts

What’s Your Financial “Why” for the New Year?

With wealth comes an expansive list of financial opportunities: paying down debt, upgrading homes, maximizing retirement savings, or supporting future generations. The real question isn’t what’s possible, but what’s most important