Market Analysis December 2025
As we look ahead to 2026, we want to acknowledge the complexity of the moment we are in. Besides the tragedies happening all around us, this has also been a time marked by strong market headlines, deeper structural questions, and a growing sense that the world is moving through a period of financial transition. Within this broader context we are navigating, we are moving into a period that calls for greater attentiveness; not fear or urgency, but care.
Equity Markets: Paying Attention in a Time of Big Comparisons
For many years, markets benefited from low interest rates, easy money, and a belief that major disruptions could always be managed or absorbed. That framework has largely held since the financial crisis in 2008, even as underlying imbalances have quietly grown. This does not suggest that a downturn or crisis is imminent, nor does it call for dramatic changes. It does suggest that this is a time to pay closer attention and to remain grounded, selective, and patient focusing on strong businesses, reasonable valuations, and diversification, while staying humble about what markets can sustainably deliver during periods of transition.
Fixed Income: Stability, Income, and Long-Term Purpose
The bond markets have also gone through a period of adjustment. Higher interest rates brought more attractive yields, but they also caused bond prices to decline, which temporarily weighed on returns in many portfolios. As rates have begun to decrease, the pricing on those legacy bond holdings have started to recover. We remain confident in our diversified approach to fixed income, particularly in municipal bonds tied to essential services such as utilities, transportation, and infrastructure. We have been more selective in corporate bonds, where opportunities have been limited and risks are not always well compensated for.
Private Markets: A Necessary Reset, Especially in Impact Investing
Private markets, particularly in the impact arena, are emerging from a meaningful period of adversity and success. After years of abundant capital and optimism, some private funds are doing quite well, and their portfolio companies are seeing consistent growth and follow-on funding. On the other side, some private funds have experienced a steep decrease in value from a specific company within their portfolio that suffered the consequence of expensive valuation, weak governance, and insufficient controls. There have been some businesses within investment portfolios failing not because their mission lacked merit, but because leadership decisions, misaligned incentives, or there were breaches of trust that undermined execution. We expect a healthier environment to emerge over time that has more realistic valuations, better governance, and stronger alignment between mission and durability.
Bringing It Together
Public markets are navigating a changing backdrop, private markets are working through a necessary recalibration, and bond markets are re-establishing their role after an unusual period of higher rates, and now into an era of quantitative easing. In moments like this, the most reliable response is to balance while staying diversified, patient, and grounded in fundamentals.
A single pine branch in front of holiday lights.