2025 Year in Review & Looking Forward in 2026

Mitch C. Walsh, MBA, CFP®

February 9, 2026

Despite some rosy return figures at the end of 2025, we again saw a significant amount of volatility over the course of the year. In the wake of the Liberation Day tariff announcements, we watched the S&P 500 drop over 21% (intraday). The market reaction to the highest tariff levels in over 100 years was swift. ‘Mr. Market’ as Warren Buffett says, made his opinion known. While domestic businesses saw the full force of this correction, international businesses provided significant protection. This illustrates why we utilize a system of diversification in our clients’ portfolios.

In the weeks that followed, we saw trade deals start to fall into place and policy being fine-tuned. We saw complete recovery over the course of just a few months to end the year in the green. ‘Mr. Market’ provided us yet another reminder that volatility is normal and the appropriate response is to weather the storm.

Tax Updates

For 2025, the State and Local Tax Deduction (SALT) Cap has been increased from $10,000 to $40,000. We expect this to increase the number of families itemizing deductions vs. the standard deduction. There is an income phase out so please feel free to reach out with any questions.
Our clients that have been blessed with 65+ years of experience on this Earth are also eligible for new deductions that can add on to the standard deduction. There are also income limits and phase outs with these deductions so please reach out to review.
As of 2026 the State of Michigan has reduced state tax on IRA and pension withdrawals / income – we will discuss individually and plan accordingly!

How We Respond:

2025 reinforced the core tenets we adhere to:

We are long-term, goal-focused, plan-driven investors. Our core investment policy is to pursue our clients’ goals by investing in broadly diversified portfolios of quality equities.
We believe that the economy cannot be consistently forecast, nor the markets consistently timed. Moreover, we find no predictable pattern in the way markets react to—or choose to ignore—economic developments.
We conclude from these beliefs that the only way to be reasonably confident of capturing the full premium return of equities is to ride out their frequent, sometimes significant, but historically always temporary, declines.
We do not react to, much less try to anticipate, economic and/or market events. As long as our clients’ long-term goals remain unchanged, so will our plan for their achievement.