Our mission is to help you Preserve Your Assets and Protect Your Lifestyle. Our newsletter aims to educate you on the economic environment and provide life perspectives and financial planning ideas to help you!

 

Quarterly Market Review

 

 

iM Global Partner’s Market Slides

 

🔷- The Fed and monetary policy remain a key focus. The Fed cut rates 3 times during the year, bringing the policy rate to 3.5% - 3.75% and current expectation is for one more cut in 2026. The FOMC’s single-cut expectations reflect caution about above-target (2%) inflation while acknowledging a softening job market. Our base case is that the yield curve will steepen in 2026, with most of the steepening coming from the front-end moving lower.

 

🔷- Looking ahead to 2026, our outlook remains constructive, with real GDP growth expected to range between 2.0% and 3.0%, supported by consumer spending and ongoing investment cycle tied to infrastructure, energy, and productivity-enhancing technologies. While AI-related investment has been a major contributor to recent growth, we expect its pace to slow from the exceptionally fast levels seen over the past two years.

 

🔷- For US stock markets, current levels suggest returns will be driven more by earnings durability and cash-flow generation than by further multiple expansion. Notably, much of today’s technology-led earnings growth is underpinned by tangible,  long-term capital investment rather than financial leverage, differentiating this cycle from prior valuation peaks.

 

Morningstar

 

🔷- Trade tensions and tariffs remain a key topic. US tariffs could rise further and new levies on China could cause further disruption. Equally important, our research suggests that the US economy has yet to fully absorb the tariff hikes already implemented. Alongside trade, the Fed will continue to influence markets. The Fed restarted its rate-cut cycle in September after a nine-month pause, prompted by warning signs in the US labor market.

 

🔷- Interestingly, the factor most likely to shape long-term macroeconomic outcomes in 2026 – whether positively or negatively – is technological rather than political. Artificial intelligence, in particular, has the potential to drive sustained productivity growth, which could lift GDP and influence interest rates and other key economic variables. However, the rapid expansion of AI infrastructure, especially in the absence of clear monetization strategies, introduces downside risk. If investor sentiment shifts, the resulting pullback could have significant macroeconomic implications.

 

🔷- Over the past 10 years, the stock market has grown increasingly concentrated in AI-related names. Ten years ago, Nvidia, Microsoft, Amazon, Meta, Broadcom, Alphabet and Oracle were 9.7% of the Morningstar US Target market Exposure Index. Today, their weight has almost tripled, now at 28.7%. This means that even those investors with substantial exposure to broad market index are heavily exposed to AI-driven returns. For those seeking to reduce concentration risk or lacking the appetite for such exposure, we recommend diversifying into US value and small-cap stocks, which currently trade at a discount to our fair value estimates and have far less AI exposure, or shifting portfolios to stocks in selected foreign equity markets.

 

Schwab Market Perspective

 

🔷- The current economic and market cycle is characterized by instability rather than mere uncertainty. Uncertain environments still allow for forecasters to build somewhat reliable probability models Unstable environments bring less-reliable probabilities because the underlying relationships are changing in real time. Instability stems from the inner workings of the system itself, such as:

• Tariffs and their uneven application
• Housing supply frozen because existing homeowners have locked in low mortgages and can’t move without taking out new mortgages at higher rates
• Labor supply altered by immigration shifts
• Fiscal stimulus and deficits decoupling from the business cycle

 

🔷- A good chunk of upside risk to inflation might be driven by tariffs. Tariffs are not only impacting prices on goods coming from overseas, but domestic goods as well. As a reminder, tariffs are taxes on U.S. importers; they are not (repeat, not) paid by exporters in other countries, which is confirmed by the fact that the Import Price Index remains unchanged so far this year. While we think companies will continue to implement cost mitigation efforts (such as low hiring) to avoid steep price increases for the end consumer, there might be thinner profit margins as inventories are worked down.

 

🔷- The tax cuts implemented by Congress tend to favor higher-income consumers and corporations, which should keep the economy growing at a rate slightly above the long-term trend of about 2%-2.5%. Consequently, the Fed doesn’t appear to have much room to lower the policy rate. We believe 3% is likely to be a floor. That implies two to three 25-basis-point rate cuts in 2026 with a weakening trend in the labor market being a major factor.

 

GFP Perspective:

 

🔷- We concur with Schwab that the housing market is frozen. The combination of inadequate supply, high price expectations from would-be sellers, prohibitively high borrowing rates for would-be buyers, too-good-to-sell rates for current owners  all “froze” housing activity over the last few years.

 

🔷- The labor market is clearly decelerating and has characterized this environment as a “jobless recovery”. The US economy added only 525,000 jobs over the last year, the slowest pace of job growth since 2020. The slowdown is spread across nearly all major industries except healthcare. It reflects a labor market continually stagnating in a “no-hire” equilibrium.

 

🔷- Expect DC to run it hot. First, the OBBBA tax cuts, which mostly take effect this year, will act as fiscal stimulus. Second, the Fed is also in stimulus mode via balance sheet expansion and possibly more rate cuts. Third, Fed officials are overhauling US bank regulations to focus on promoting growth.

 

If you have questions about your portfolio, please contact us anytime.

 

This is Life

 

 

Hello ’26 and Goodbye ’25

 
By: Patrick Guinet , CIMA®

 

“The most important investment you can make is in yourself.” — Warren Buffett

 

There’s something meaningful about the space between years—not the countdown, but the pause. The moment when we reflect on where we’ve been and consider what lies ahead.

 

As we say goodbye to 2025, it feels less like closing a chapter and more like taking a breath. The year brought progress, challenges, and reminders that life—and investing—rarely move in straight lines.

For those still building toward retirement, 2025 tested patience. Markets had their moments, headlines were distracting, and discipline mattered. A structured plan, thoughtful diversification, and consistency helped keep long-term goals on track without reacting to short-term noise.

 

For those approaching or already in retirement, the focus shifted from accumulation to sustainability. Conversations centered on income reliability, appropriate risk, and flexibility—ensuring portfolios were aligned with real-life needs such as lifestyle spending, healthcare, family priorities, and legacy planning.

 

Different stages. Different priorities. One consistent approach.

 

Clear goals. Aligned portfolios. Ongoing monitoring. Thoughtful adjustments as circumstances change.

 

At Guardian Financial Partners, this process reflects our role as fiduciaries. Our responsibility is to act in our clients’ best interests by providing objective advice, prudent oversight, and ongoing review—while placing client goals and risk considerations ahead of firm or individual interests.

 

As we enter 2026, we remain focused on preparation rather than prediction—reviewing plans, monitoring portfolios, and making adjustments when appropriate, guided by long-term objectives rather than short-term market movements.

 

A new year doesn’t erase the past; it builds on it. We carry forward the lessons of 2025 and the perspective gained from navigating another year with discipline and care.

 

So hello, 2026—and goodbye, 2025.

 

Thank you for the trust you place in us.

 

As we begin the year, we encourage you to come prepared for your upcoming portfolio review and financial planning meeting by considering any changes to your goals, cash flow, or personal circumstances, helping ensure your strategy remains aligned as life evolves.

 

This is life—personal, evolving, and worth planning for carefully.

 

Education to Empower You

 

 

We wanted to make sure you are aware of the official income tax brackets for the 2026 tax year, reflecting changes made under the recent tax bill.

 

Here’s a quick snapshot of the 2026 federal tax brackets:

• 10% for income up to $12,400 ($24,800 for married couples filing jointly)
• 12% for income over $12,400 ($24,800 for married couples filing jointly)
• 22% for income over $50,400 ($100,800 for married couples filing jointly)
• 24% for income over $105,700 ($211,400 for married couples filing jointly)
• 32% for income over $201,775 ($403,550 for married couples filing jointly)
• 35% for income over $256,225 ($512,450 for married couples filing jointly)
• 37% for income over $640,600 ($768,700 for married couples filing jointly)

 

Here are some additional 2026 tax-related figures to keep in mind:

• The standard deduction will increase to $16,100 for single filers and $32,200 for married couples filing jointly.
• The maximum earned income tax credit will increase to $8,231 for qualifying taxpayers with three or more children.
• The health flexible spending account (FSA) contribution limit will rise to $3,400, up $100 from 2025.
• The federal estate tax limit will increase to $15 million per person, up from nearly $14 million in 2025.

 

Note that the tax changes will apply in 2026 and will be reflected on tax returns filed in early 2027. However, planning ahead can make a big difference, especially if you expect significant income changes, asset sales, or retirement within the next few years.

 

If you’d like to review how these new brackets might impact your strategy, feel free to contact us anytime.