For many investors, 2025 felt like “The Long and Winding Road.” Markets and economists started the year with a lot of optimism around expected tax policy, deregulation, and a general pro-business administration. However, all that optimism came crashing down in March and April, culminating with the Liberation Day tariff announcements. The volatility and uncertainty that occurred during those few weeks led to many difficult conversations, as periods of dislocation almost always do. Despite a 20% intraday pullback in most major market indices, 2025 has ended up as the third year in a row of double-digit gains, with many asset classes, such as foreign and emerging market stocks and precious metals, outperforming their US brethren.
Source: Wikipedia
As we end 2025, investors who did not panic and sell when markets were near lows in early April saw their portfolios rebound strongly throughout the balance of the year. This has led to many happier discussions with clients who are looking at their portfolio balances and future liquidity needs with a much cheerier and more confident outlook. Many clients have thanked the CFPs at Impel Wealth Management for the performance of their portfolios. We remind them of Warren Buffett’s wisdom, “never confuse brains with a bull market.” We are certainly happy with the outcomes of our portfolios this year, but we also remember that it is much easier to look smart when markets go up.
As we turn the corner to a new year, we are going to move from The Beatles to The Rolling Stones. "You Can't Always Get What You Want" is a landmark song by the Rolling Stones, first released in July 1969 as the B-side to "Honky Tonk Women" before appearing as the closing track on their album “Let It Bleed” later that year. It was named as the 100th greatest song of all time by Rolling Stone magazine in its 2004 list of the "500 Greatest Songs of All Time" before dropping a place the following year. A line from that song that feels especially relevant as investors look ahead to 2026: “You can’t always get what you want, but if you try sometimes, you get what you need.”
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For those of you who would like to hum along to this classic rock anthem as you read the rest of this blog post, I have included a YouTube clip of the official Rolling Stones video for you below.
The Rolling Stones - You Can’t Always Get What You Want (Official Video) [4K]
After another year marked by strong returns, resilient growth, and surprisingly cooperative macro conditions, it’s natural to want more of the same. Smooth growth. Falling inflation. Accommodative policy. Expanding valuations. In other words, a perfect sequel. 2026 is more likely to offer something different…and arguably more constructive: a year defined not by excess, but by balance. Not by euphoria, but by discipline. And not by broad, effortless gains, but by selective opportunity for those willing to look past the headlines.
Recent macro outlooks suggest a plausible scenario where economic conditions remain broadly supportive in 2026. Growth is expected to remain positive. Inflation appears more contained than feared. The recent Summary of Economic Projections (SEP) released by the Federal Reserve Bank raised its 2026 GDP forecast while downgrading inflation expectations. The corporate earnings outlook continues to benefit from productivity improvements and targeted investment, particularly in technology and automation.
This is a Goldilocks-like setup: not too hot, not too cold. But unlike the fairy tale, this version doesn’t promise a frictionless path. It’s conditional. It depends on inflation staying anchored, policy missteps being avoided, and productivity gains translating into real economic output rather than just higher expectations. In other words, things can go right, but only within a narrower margin for error.
We believe cautious optimism remains warranted in the year ahead. Below are several reasons the forward-looking tone has improved:
Productivity and AI investment continue to reshape business models, supporting productivity and profit margins.
Policy visibility, while never perfect, appears less destabilizing than in the prior year, reducing one source of uncertainty. A clearer picture of tariffs, tax policy, and deregulation should free businesses to make capital decisions, such as investing in AI, new plants and equipment, hiring new employees, and reshoring supply chains. As you can see in our first chart below, markets tend to move inversely with policy uncertainty.
Consumer fundamentals remain intact, despite a cooling labor market, providing a floor under demand. Consumer spending should continue to be buoyed by lower gasoline prices, slowing rental costs, and the expectation that approximately 2/3 of US taxpayers expect to receive tax refunds in the first part of next year. These refunds, typically distributed in February and March, are expected to total up to $150 billion and should lead to continued consumption, which historically drives economic growth.
Global growth is expected to persist, with diversification opportunities outside the most crowded U.S. trades.
Earnings expectationsfor 2026 remain above long-term averages, suggesting fundamental support beneath market prices. This favorable macroeconomic backdrop is supporting corporate earnings in both the United States and abroad in 2026. As you can see in our following chart, consensus earnings estimates for the coming year are for more positive earnings growth than even what we experienced in 2025, especially in the United States, emerging markets, and China.
Taken together, these factors argue against a recessionary narrative becoming the base case. They also suggest that pessimism, while fashionable at times, is not particularly well supported by the data.
At the same time, the risks are more complex to ignore than they were earlier in the cycle. Market leadership has been narrow. Valuations in certain segments are stretched. And the labor market, while stable, is no longer providing the same tailwinds it once did. This combination raises the stakes for investors relying solely on momentum. 2026 may reward patience and selectivity more than speed. Quality balance sheets, durable cash flows, and realistic growth assumptions matter more when the margin for disappointment shrinks.
To echo Keith Richards and Mick Jagger above, this is less a market for chasing what wewant, rapid, broad-based upside, and more one for positioning portfolios around what we need: resilience, diversification, and flexibility.
From an investment advisory perspective, the implications are straightforward, even if execution is not. We plan to maintain exposure to growth, but be intentional about where it comes from. We will continue to look beyond the most crowded areas of the market for opportunities. We agree with Richard Bernstein, Chief Economist at RBA Advisors, who stated that in 2026, boring is beautiful. You don't have to look for exotic or speculative investments to maintain a disciplined, diversified portfolio. Treat volatility as a feature of the environment, not a flaw in the plan. We should all be used to bouts of volatility by now. However, each one brings a new round of screaming from the financial media that this time is different. Please do your best to ignore the noise.
As a reminder, please resist the urge to extrapolate recent performance indefinitely into the future. For the last three years, double-digit returns in even diversified 60% stock, 40% bond portfolios have led people to believe this should guide their future expectations. This is definitely not the case. From a historical standpoint, a 60/40 portfolio should average approximately 6%-8% per year, not the outsized gains of the recent past.
It's not often that I can use both The Beatles and The Rolling Stones in the same blog post. Returning to our Rolling Stones theme song, 2026 may not deliver everything investors want: effortless gains, perfect policy alignment, or a market that rewards every risk taken. But it may provide what long-term portfoliosneed: a healthier balance between growth and restraint, between opportunity and risk, between optimism and realism.
For investors willing to embrace that tradeoff, the year ahead doesn’t have to be feared. It must be navigated with perspective, patience, and a clear understanding of what truly matters. The CFPs of Impel Wealth will be here to walk along with you in this journey. We wanted to remind you of this as we've turned the calendar to a new year and continue “Moving Life Forward.”
© 2025 Jesse Hurst
Senior Wealth Manager
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The views stated are not necessarily the opinion of Cetera and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.
Neither Cetera Advisors LLC nor any of its representatives may give legal or tax advice. This information is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.
Investors cannot directly invest in indices.
The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing.
Additional risks are associated with international investing, such as currency fluctuations, political and economic stability, and differences in accounting standards.
A diversified portfolio does not assure a profit or protect against loss in a declining market.
The MSCI Europe Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance in Europe.
The MSCI Japan Index is designed to measure the performance of the large and mid cap segments of the Japanese market. With 182 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in Japan.
The MSCI Emerging Markets Index is designed to measure equity market performance in global emerging markets. It is a float-adjusted market capitalization index.
The MSCI China Index captures large and mid cap representation across China A shares, H shares, B shares, Red chips, P chips and foreign listings (e.g. ADRs). With 560 constituents, the index covers about 85% of this China equity universe. Currently, the index includes Large Cap A and Mid Cap A shares represented at 20% of their free float adjusted market capitalization.
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