Stocks had another strong year in 2025 as most market benchmarks enjoyed their third straight year of double-digit returns. Last year’s performance was particularly rewarding given how much stocks overcame — notably tariffs. Tariffs weren’t the only obstacle, as market concentration, high valuations, deficit spending, and inflation occupied spots on investors’ lists of worries. Reflecting on 2025, here are some noteworthy takeaways:
In our view, bears are usually wrong. The stock market had plenty of skeptics when 2025 began, just like 2023 and 2024. While stocks have down years, on average, they go up about three times as often as they fall (based on S&P 500 Index returns since 1980), though past performance does not guarantee future results.
Stocks usually follow earnings. S&P 500 companies in aggregate grew earnings at a double-digit pace in 2025 and have the potential do so again in 2026, bolstering stock performance. It’s no coincidence the technology sector produced some of the strongest earnings growth and best returns last year.
Policy matters; politics, less so. The volatility that almost ended the bull market last spring was driven mostly by tariffs, which directly impact corporate profitability. Once tariffs were reduced or removed, the major averages quickly reclaimed prior highs. If politics don’t hurt corporate profits, e.g., in a government shutdown, we believe they are unlikely to hurt the stock market.
Big market drawdowns and attractive annual returns can coexist. The S&P 500 dropped to 19% below its record high at its 2025 low on April 8 but ended more than 16% higher for the year. Since 1980, the S&P 500 has averaged an 11% annual gain (excluding dividends) and a 14% maximum intra-year drawdown. This perspective and a long-term focus can help ensure volatility doesn’t knock you off course as you pursue long-term goals.
Lower interest rates are good for both stocks and bonds. The Bloomberg U.S. Aggregate Bond Index gained more than 7% in 2025 on the back of lower interest rates as the Federal Reserve (Fed) lowered its target rate and inflation moderated. Those lower rates also helped stocks maintain lofty valuations at a price-to-earnings ratio (P/E) near 22 based on the consensus S&P 500 earnings per share estimate for the next 12 months. Valuations are not good predictors of performance year to year.
Looking ahead to 2026, stocks face some of the same challenges they did in 2025. While tariffs may play a smaller role, policy uncertainty around midterm elections could contribute to more volatility in the year ahead. With fiscal stimulus, Fed rate cuts, and huge artificial intelligence investments coming, another year of gains appears likely.
As always, please reach out to me with questions.
Thank you for your continued trust.
Warmest Regards,
Wayne Rigney
Important Information
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.
References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.
All data is provided as of January 7, 2026.
All index data from FactSet.
The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
The PE ratio (price-to-earnings ratio) is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share. It is a financial ratio used for valuation: a higher PE ratio means that investors are paying more for each unit of net income, so the stock is more expensive compared to one with lower PE ratio.
The Bloomberg U.S. Aggregate Bond Index is an index of the U.S. investment-grade fixed-rate bond market, including both government and corporate bonds.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Past performance does not guarantee future results.
Asset allocation does not ensure a profit or protect against a loss.
This research material was prepared by LPL Financial, LLC.
Not Insured by FDIC/NCUA or Any Other Government Agency
Not Bank/Credit Union Guaranteed
Not Bank/Credit Union Deposits or Obligations
MayLose Value
RES-0006531-1225 | For Public Use | Tracking #843899 | #843901 (Exp. 01/2027)
LPL Research is pleased to present Outlook 2026: The Policy Engine. Their annual update offers a thorough analysis of the economy and markets, highlighting potential implications for you. I’m pleased to bring you a few of the key highlights today.
The year 2025 offered a clear illustration of today’s prevailing market regime — one that has been shaped less by traditional fundamentals and business cycle dynamics and more by fiscal and monetary policy. While policy has always influenced markets, its role has increasingly grown. What does this mean as we look ahead to 2026?
In an environment where policy decisions are one of the most powerful forces steering market direction, LPL Research believes patience is essential. Avoid overreacting to short-term sentiment swings, as policy- and momentum-driven markets tend to produce sharp price fluctuations — which can challenge our behavioral biases. We saw this in 2025, when stock prices swung from policy-induced lows to momentum-driven highs.
The good news: LPL Research anticipates policy will remain a net tailwind for markets in 2026. Short term interest rates are likely to continue easing as economic growth moderates and inflation stays contained. Corporate earnings may provide support, while core bonds quietly offer value (and should benefit from a more dovish Federal Reserve). In addition, given correlations can spike in policy-driven markets, investors may want to consider non-correlated alternative investments as part of a diversified approach.
Several key themes will likely continue shaping the landscape in 2026. Equity markets should remain resilient but vulnerable to volatility, while a fragmented economic backdrop limits clear trends in bonds. Policy decisions in Washington will remain a dominant force, influencing sentiment. The post-pandemic cycle is still distorted, with growth steady yet uneven, inflation persistently above target, and labor markets gradually softening. Add to this the effects of massive fiscal spending, an AI-driven capital investment boom, and more, and the result is an environment that defies traditional patterns. In this setting, diversification and agility are critical.
These are just some of the insights you’ll find in Outlook 2026: The Policy Engine. To get more, including considerations and potential action steps we can discuss, visit go.lpl.com/investoroutlook.
Wishing you a safe and enjoyable holiday season. As always, please reach out to me with questions.
Sincerely,
Wayne Rigney
Important Information
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.
References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.
All data is provided as of December 9, 2025.
All index data from FactSet.
The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Past performance does not guarantee future results.
Asset allocation does not ensure a profit or protect against a loss.
This research material was prepared by LPL Financial, LLC.
Not Insured by FDIC/NCUA or Any Other Government Agency
Not Bank/Credit Union Guaranteed
Not Bank/Credit Union Deposits or Obligations
MayLose Value
RES-0006041-0925 | For Public Use | Tracking #830455 | #830456 (Exp. 12/2026)
SUMMARY : This document presents LPL Research’s outlook for 2026, emphasizing the influence of policy decisions on market dynamics and investment strategies.
Market Dynamics and Policy Influence
The 2025 market was characterized by volatility driven more by fiscal and monetary policy than by traditional fundamentals.
Investors are advised to remain patient and avoid overreacting to short-term sentiment, as policy shifts can lead to significant price fluctuations.
A continued easing of monetary policy is expected, supporting market momentum and potentially benefiting corporate earnings.
Economic Outlook
The U.S. economy is projected to experience a modest slowdown in early 2026, followed by a rebound later in the year.
Resilience from AI-driven investments and fiscal spending is anticipated to offset weaker household activity, steering clear of recession.
A cooling labor market and reduced consumer demand should help ease inflation, with the Federal Reserve expected to gradually cut rates.
Investment Strategies
Stocks: The bull market is likely to continue, driven by enthusiasm for AI and easing monetary policy. However, high valuations may temper gains, with an S&P 500 target range of 7,300 to 7,400. Investors should maintain current allocations and selectively increase equity exposure during pullbacks.
Bonds and Cash: Bonds present attractive income opportunities with elevated yields. Investors are encouraged to focus on income generation rather than price appreciation, as returns on cash are expected to decline with rate cuts.
Currencies: The dollar’s long-term uptrend is respected, supported by big tech leadership and pro-growth stimulus. However, potential monetary easing and trade policy uncertainties may limit upside.
Alternative Investments: Strategies that enhance diversification and mitigate downside risk are favored, including equity market-neutral and discretionary macro approaches. Merger arbitrage and private equity are also seen as beneficial due to increased corporate deal-making.
General Disclosures
The document emphasizes that the opinions and forecasts are general and not tailored to individual investment needs. It highlights the inherent risks in investing, including potential loss of principal and market volatility. Investors are encouraged to consult financial professionals for personalized advice.
Stock investors were rewarded for staying the course in November as broad stock market averages recovered from a mid-month dip to end near record highs. The comeback extended the S&P 500 Index’s streak of monthly gains to seven – something to be thankful for alongside the arrival of the holiday season. Increasing confidence in Federal Reserve (Fed) rate cuts was a key driver, but renewed confidence in the economic and corporate profit outlook and artificial intelligence (AI) investment certainly played a role, in our view.
As December begins, markets will continue to take directional cues from the job market, which will be key to preserving consumer spending during the important holiday shopping season. We expect slower but still positive job growth as government data delayed by the recent shutdown fills in. The approximately $130 billion in annualized incremental consumer tax cuts from the One Big Beautiful Bill Act (OBBBA) will start flowing in February 2026, not far off. The White House has also pivoted toward tackling affordability challenges. The K-shaped economy — where upper-income folks enjoy rising asset values while those living paycheck-to-paycheck struggle — remains a challenge. Policies to help lift the bottom half of the “K”, perhaps through the housing market, may help shore up the overall consumer spending picture.
As U.S. consumers hang in there, corporate America is thriving. The just-completed third quarter earnings season underscored companies’ ability to clear a higher bar. More than 82% of S&P 500 companies beat consensus earnings targets, the highest rate since at least 2009. Earnings grew 13%, extending the streak of double-digit increases to four quarters. Profit margins unexpectedly expanded despite increased tariff costs, supported by disciplined cost management and productivity gains. And management teams generally signaled confidence in demand, causing analysts to lift earnings estimates for 2026. Corporate America’s resilience reinforces the case for maintaining equity exposure in line with long-term targets.
As we prepare to turn the page to 2026, several factors warrant close attention. The Fed’s policy trajectory remains central, with inflation trends and the labor market guiding the central bank. While a rate cut is now fully anticipated in December, the number of cuts beyond that will hinge on incoming data. Other factors to consider as investor attention shifts to the year ahead include increasing scrutiny around AI investment, midterm elections, the U.S. dollar, and ongoing geopolitical threats.
Against this backdrop, investors may benefit from prioritizing diversification and risk mitigation in 2026. Bouts of volatility are likely and may present attractive entry points for disciplined investors. Opportunities exist in sectors aligned with growth drivers such as AI, fiscal stimulus from the One Big Beautiful Bill Act (OBBBA), and changes in regulatory policy, but investors will want to maintain flexibility. We believe corrections are a price we must pay to pursue compelling returns over the long term.
Thank you for your continued trust.
Sincerely,
Wayne Rigney
Important Information
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.
References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.
All data is provided as of December 3, 2025.
All index data from FactSet.
The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Past performance does not guarantee future results.
Asset allocation does not ensure a profit or protect against a loss.
This research material was prepared by LPL Financial, LLC.
Not Insured by FDIC/NCUA or Any Other Government Agency
Not Bank/Credit Union Guaranteed
Not Bank/Credit Union Deposits or Obligations
MayLose Value
RES-0006414-1125 | For Public Use | Tracking #831847 | #831850 (Exp. 12/2026)
The last week of October delivered a flurry of impactful headlines across earnings, monetary policy, and geopolitics — each shaping the investment landscape as we head into year-end. Here are some key takeaways:
Corporate America continues to impress. We’re now more than 70% through third quarter earnings season and an impressive 83% of S&P 500 companies have exceeded earnings expectations, putting index companies collectively on track to deliver a fourth straight quarter of double-digit earnings growth. The surge in capital expenditures from Big Tech has been a standout theme. The top seven technology companies are now expected to invest more than $500 billion next year to build out AI infrastructure, underscoring the intensity of the AI arms race. While investors have generally welcomed this investment, the cool reception to Meta’s (META) results highlights growing scrutiny.
The Federal Reserve (Fed) introduced uncertainty about the future path of rates. Fed Chair Powell emphasized that a December rate cut was “far from a foregone conclusion.” As anticipated, the Fed cut interest rates by 0.25% at its October Federal Open Market Committee (FOMC) meeting. However, the Committee remains divided, and the tone was less dovish than markets hoped, sending Treasury yields higher. Labor market commentary was also revealing, painting a picture of a “no hire, no fire” dynamic as companies mostly held headcounts steady amid economic uncertainty. From our perspective, labor market risks make the case for continued rate cuts into 2026 despite lingering upside risks to inflation.
S.-China trade truce reduced the risk of escalation. President Trump and President Xi reached a one-year trade truce at the APEC summit in South Korea last week. Key elements include reduced U.S. tariffs, resumed China soybean purchases, and a pause on China’s rare-earth export controls. The effective overall tariff burden is around 12%, well below most policy strategists’ expectations in the mid-teens. Easing trade tensions and reduced tariffs have provided a tailwind for corporate earnings.
These significant developments were generally well received by financial markets — enough to clinch the sixth straight positive month for the S&P 500 Index and the seventh straight for the Nasdaq Composite. While past performance does not guarantee future results, November through April has historically been the best six-month period of the year for stocks, although some gains may have been pulled forward and concentrated market leadership introduces some fragility to a bull market that hasn’t experienced a 5% pullback in nearly six months.
In closing, surprising earnings upside, easing trade tensions, and a favorable seasonal setup are balanced against supportive but less predictable monetary policy. We favor a selective tactical approach into year-end.
Thank you for your continued trust.
Sincerely,
Wayne Rigney
Important Information
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.
References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.
All data is provided as of November 5, 2025.
All index data from FactSet.
The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Past performance does not guarantee future results.
Asset allocation does not ensure a profit or protect against a loss.
This research material was prepared by LPL Financial, LLC.
Not Insured by FDIC/NCUA or Any Other Government Agency
Not Bank/Credit Union Guaranteed
Not Bank/Credit Union Deposits or Obligations
MayLose Value
RES-0006305-1025 | For Public Use | Tracking #819847 | #819848 (Exp. 11/2026)
The October 1 deadline has passed, and the U.S. government has shut down. While political gridlock is never ideal, history suggests that shutdowns tend to be short-lived and have minimal sustained impact on the economy or the stock market. They are largely about political posturing and therefore don’t take long to get resolved. Simply put, delaying Social Security checks is not a winning political strategy, so it almost certainly won’t happen (we can’t make guarantees, but this is close).
Republicans do need votes from Democrats, and we know there hasn’t been much nice playing in the sandbox in Washington, D.C. lately, introducing the possibility of an extended shutdown. Democrats are seeking healthcare concessions, including reversing Medicaid cuts and extending Affordable Care Act subsidies. Meanwhile, the Republicans are threatening more public-sector layoffs in areas not aligned with the President’s priorities, as each side stakes out its position.
Investors have smartly looked past budget disruptions throughout history, rightly focusing on traditional fundamental drivers of the economy and stock market such as corporate earnings, consumer spending, business investment, inflation, and interest rates. That said, sectors heavily reliant on government contracts — such as defense and life sciences — may experience some short-term volatility. An extended shutdown, which could delay key economic data releases, including the October 3 jobs report, could detract slightly from economic growth but is unlikely to be material, in our view.
Since 1976, the U.S. has experienced 20 shutdowns, averaging just eight days in duration. The longest, in 2018–2019, lasted 34 days. Importantly, the S&P 500 has historically posted average gains of 1.2% and 2.9% in the one- and three-month periods following budget resolutions, underscoring the market’s resilience, though past performance does not guarantee future results. Even if investors ignore the government shutdown, a pause may be in order given how far stocks have come since April — even as more tariffs are absorbed.
While we see rising odds of a 5–10% pullback, risk to this bull market appears low thanks to a resilient economy, strong earnings, the resumption of the Fed’s rate-cutting cycle, and long-term catalysts like AI-driven productivity gains and fiscal stimulus from the One Big Beautiful Bill Act (OBBBA). Against that backdrop, a pullback could offer an attractive buying opportunity.
In short, while near-term volatility is possible, or perhaps even likely, the broader outlook remains constructive. We encourage investors to emphasize stock market fundamentals over political theater and consider pullbacks as potential buying opportunities.
Thank you for your continued trust.
Sincerely,
Wayne Rigney
Important Information
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.
References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.
All data is provided as of October 1, 2025.
All index data from FactSet.
The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Past performance does not guarantee future results.
Asset allocation does not ensure a profit or protect against a loss.
This research material was prepared by LPL Financial, LLC.
Not Insured by FDIC/NCUA or Any Other Government Agency
Not Bank/Credit Union Guaranteed
Not Bank/Credit Union Deposits or Obligations
MayLose Value
RES-0006090-0925 | For Public Use | Tracking #804125 | #804128 (Exp. 10/2026)
JANUARY 2026 CLIENT LETTER
Client LettersJanuary 7, 2026
Dear Valued Investor,
Stocks had another strong year in 2025 as most market benchmarks enjoyed their third straight year of double-digit returns. Last year’s performance was particularly rewarding given how much stocks overcame — notably tariffs. Tariffs weren’t the only obstacle, as market concentration, high valuations, deficit spending, and inflation occupied spots on investors’ lists of worries. Reflecting on 2025, here are some noteworthy takeaways:
Looking ahead to 2026, stocks face some of the same challenges they did in 2025. While tariffs may play a smaller role, policy uncertainty around midterm elections could contribute to more volatility in the year ahead. With fiscal stimulus, Fed rate cuts, and huge artificial intelligence investments coming, another year of gains appears likely.
As always, please reach out to me with questions.
Thank you for your continued trust.
Warmest Regards,
Wayne Rigney
Important Information
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.
References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.
All data is provided as of January 7, 2026.
All index data from FactSet.
The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
The PE ratio (price-to-earnings ratio) is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share. It is a financial ratio used for valuation: a higher PE ratio means that investors are paying more for each unit of net income, so the stock is more expensive compared to one with lower PE ratio.
The Bloomberg U.S. Aggregate Bond Index is an index of the U.S. investment-grade fixed-rate bond market, including both government and corporate bonds.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Past performance does not guarantee future results.
Asset allocation does not ensure a profit or protect against a loss.
This research material was prepared by LPL Financial, LLC.
Not Insured by FDIC/NCUA or Any Other Government Agency
RES-0006531-1225 | For Public Use | Tracking #843899 | #843901 (Exp. 01/2027)
OUTLOOK 2026 CLIENT LETTER
Client LettersDecember 9, 2025
Dear Valued Investor,
LPL Research is pleased to present Outlook 2026: The Policy Engine. Their annual update offers a thorough analysis of the economy and markets, highlighting potential implications for you. I’m pleased to bring you a few of the key highlights today.
The year 2025 offered a clear illustration of today’s prevailing market regime — one that has been shaped less by traditional fundamentals and business cycle dynamics and more by fiscal and monetary policy. While policy has always influenced markets, its role has increasingly grown. What does this mean as we look ahead to 2026?
In an environment where policy decisions are one of the most powerful forces steering market direction, LPL Research believes patience is essential. Avoid overreacting to short-term sentiment swings, as policy- and momentum-driven markets tend to produce sharp price fluctuations — which can challenge our behavioral biases. We saw this in 2025, when stock prices swung from policy-induced lows to momentum-driven highs.
The good news: LPL Research anticipates policy will remain a net tailwind for markets in 2026. Short term interest rates are likely to continue easing as economic growth moderates and inflation stays contained. Corporate earnings may provide support, while core bonds quietly offer value (and should benefit from a more dovish Federal Reserve). In addition, given correlations can spike in policy-driven markets, investors may want to consider non-correlated alternative investments as part of a diversified approach.
Several key themes will likely continue shaping the landscape in 2026. Equity markets should remain resilient but vulnerable to volatility, while a fragmented economic backdrop limits clear trends in bonds. Policy decisions in Washington will remain a dominant force, influencing sentiment. The post-pandemic cycle is still distorted, with growth steady yet uneven, inflation persistently above target, and labor markets gradually softening. Add to this the effects of massive fiscal spending, an AI-driven capital investment boom, and more, and the result is an environment that defies traditional patterns. In this setting, diversification and agility are critical.
These are just some of the insights you’ll find in Outlook 2026: The Policy Engine. To get more, including considerations and potential action steps we can discuss, visit go.lpl.com/investoroutlook.
Wishing you a safe and enjoyable holiday season. As always, please reach out to me with questions.
Sincerely,
Wayne Rigney
Important Information
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.
References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.
All data is provided as of December 9, 2025.
All index data from FactSet.
The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Past performance does not guarantee future results.
Asset allocation does not ensure a profit or protect against a loss.
This research material was prepared by LPL Financial, LLC.
Not Insured by FDIC/NCUA or Any Other Government Agency
May Lose Value
RES-0006041-0925 | For Public Use | Tracking #830455 | #830456 (Exp. 12/2026)
2026 Outlook Executive Summary
Client LettersREAD THE EXECUTIVE SUMMARY HERE
READ THE FULL OUTLOOK 2026 HERE
SUMMARY : This document presents LPL Research’s outlook for 2026, emphasizing the influence of policy decisions on market dynamics and investment strategies.
Market Dynamics and Policy Influence
Economic Outlook
Investment Strategies
General Disclosures
DECEMBER 2025 CLIENT LETTER
Client LettersDecember 3, 2025
Dear Valued Investor,
Stock investors were rewarded for staying the course in November as broad stock market averages recovered from a mid-month dip to end near record highs. The comeback extended the S&P 500 Index’s streak of monthly gains to seven – something to be thankful for alongside the arrival of the holiday season. Increasing confidence in Federal Reserve (Fed) rate cuts was a key driver, but renewed confidence in the economic and corporate profit outlook and artificial intelligence (AI) investment certainly played a role, in our view.
As December begins, markets will continue to take directional cues from the job market, which will be key to preserving consumer spending during the important holiday shopping season. We expect slower but still positive job growth as government data delayed by the recent shutdown fills in. The approximately $130 billion in annualized incremental consumer tax cuts from the One Big Beautiful Bill Act (OBBBA) will start flowing in February 2026, not far off. The White House has also pivoted toward tackling affordability challenges. The K-shaped economy — where upper-income folks enjoy rising asset values while those living paycheck-to-paycheck struggle — remains a challenge. Policies to help lift the bottom half of the “K”, perhaps through the housing market, may help shore up the overall consumer spending picture.
As U.S. consumers hang in there, corporate America is thriving. The just-completed third quarter earnings season underscored companies’ ability to clear a higher bar. More than 82% of S&P 500 companies beat consensus earnings targets, the highest rate since at least 2009. Earnings grew 13%, extending the streak of double-digit increases to four quarters. Profit margins unexpectedly expanded despite increased tariff costs, supported by disciplined cost management and productivity gains. And management teams generally signaled confidence in demand, causing analysts to lift earnings estimates for 2026. Corporate America’s resilience reinforces the case for maintaining equity exposure in line with long-term targets.
As we prepare to turn the page to 2026, several factors warrant close attention. The Fed’s policy trajectory remains central, with inflation trends and the labor market guiding the central bank. While a rate cut is now fully anticipated in December, the number of cuts beyond that will hinge on incoming data. Other factors to consider as investor attention shifts to the year ahead include increasing scrutiny around AI investment, midterm elections, the U.S. dollar, and ongoing geopolitical threats.
Against this backdrop, investors may benefit from prioritizing diversification and risk mitigation in 2026. Bouts of volatility are likely and may present attractive entry points for disciplined investors. Opportunities exist in sectors aligned with growth drivers such as AI, fiscal stimulus from the One Big Beautiful Bill Act (OBBBA), and changes in regulatory policy, but investors will want to maintain flexibility. We believe corrections are a price we must pay to pursue compelling returns over the long term.
Thank you for your continued trust.
Sincerely,
Wayne Rigney
Important Information
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.
References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.
All data is provided as of December 3, 2025.
All index data from FactSet.
The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Past performance does not guarantee future results.
Asset allocation does not ensure a profit or protect against a loss.
This research material was prepared by LPL Financial, LLC.
Not Insured by FDIC/NCUA or Any Other Government Agency
May Lose Value
RES-0006414-1125 | For Public Use | Tracking #831847 | #831850 (Exp. 12/2026)
NOVEMBER 2025 CLIENT LETTER
Client LettersNovember 5, 2025
Dear Valued Investor,
The last week of October delivered a flurry of impactful headlines across earnings, monetary policy, and geopolitics — each shaping the investment landscape as we head into year-end. Here are some key takeaways:
These significant developments were generally well received by financial markets — enough to clinch the sixth straight positive month for the S&P 500 Index and the seventh straight for the Nasdaq Composite. While past performance does not guarantee future results, November through April has historically been the best six-month period of the year for stocks, although some gains may have been pulled forward and concentrated market leadership introduces some fragility to a bull market that hasn’t experienced a 5% pullback in nearly six months.
In closing, surprising earnings upside, easing trade tensions, and a favorable seasonal setup are balanced against supportive but less predictable monetary policy. We favor a selective tactical approach into year-end.
Thank you for your continued trust.
Sincerely,
Wayne Rigney
Important Information
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.
References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.
All data is provided as of November 5, 2025.
All index data from FactSet.
The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Past performance does not guarantee future results.
Asset allocation does not ensure a profit or protect against a loss.
This research material was prepared by LPL Financial, LLC.
Not Insured by FDIC/NCUA or Any Other Government Agency
May Lose Value
RES-0006305-1025 | For Public Use | Tracking #819847 | #819848 (Exp. 11/2026)
OCTOBER 2025 CLIENT LETTER
Client LettersOctober 1, 2025
Dear Valued Investor,
The October 1 deadline has passed, and the U.S. government has shut down. While political gridlock is never ideal, history suggests that shutdowns tend to be short-lived and have minimal sustained impact on the economy or the stock market. They are largely about political posturing and therefore don’t take long to get resolved. Simply put, delaying Social Security checks is not a winning political strategy, so it almost certainly won’t happen (we can’t make guarantees, but this is close).
Republicans do need votes from Democrats, and we know there hasn’t been much nice playing in the sandbox in Washington, D.C. lately, introducing the possibility of an extended shutdown. Democrats are seeking healthcare concessions, including reversing Medicaid cuts and extending Affordable Care Act subsidies. Meanwhile, the Republicans are threatening more public-sector layoffs in areas not aligned with the President’s priorities, as each side stakes out its position.
Investors have smartly looked past budget disruptions throughout history, rightly focusing on traditional fundamental drivers of the economy and stock market such as corporate earnings, consumer spending, business investment, inflation, and interest rates. That said, sectors heavily reliant on government contracts — such as defense and life sciences — may experience some short-term volatility. An extended shutdown, which could delay key economic data releases, including the October 3 jobs report, could detract slightly from economic growth but is unlikely to be material, in our view.
Since 1976, the U.S. has experienced 20 shutdowns, averaging just eight days in duration. The longest, in 2018–2019, lasted 34 days. Importantly, the S&P 500 has historically posted average gains of 1.2% and 2.9% in the one- and three-month periods following budget resolutions, underscoring the market’s resilience, though past performance does not guarantee future results. Even if investors ignore the government shutdown, a pause may be in order given how far stocks have come since April — even as more tariffs are absorbed.
While we see rising odds of a 5–10% pullback, risk to this bull market appears low thanks to a resilient economy, strong earnings, the resumption of the Fed’s rate-cutting cycle, and long-term catalysts like AI-driven productivity gains and fiscal stimulus from the One Big Beautiful Bill Act (OBBBA). Against that backdrop, a pullback could offer an attractive buying opportunity.
In short, while near-term volatility is possible, or perhaps even likely, the broader outlook remains constructive. We encourage investors to emphasize stock market fundamentals over political theater and consider pullbacks as potential buying opportunities.
Thank you for your continued trust.
Sincerely,
Wayne Rigney
Important Information
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.
References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.
All data is provided as of October 1, 2025.
All index data from FactSet.
The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Past performance does not guarantee future results.
Asset allocation does not ensure a profit or protect against a loss.
This research material was prepared by LPL Financial, LLC.
Not Insured by FDIC/NCUA or Any Other Government Agency
May Lose Value
RES-0006090-0925 | For Public Use | Tracking #804125 | #804128 (Exp. 10/2026)