HPWG December 2025 Market Update Podcast

Todd: Hello and welcome to the December Hoffman Private Wealth Group Podcast.

My name is Todd Hoffman. I am a Certified Portfolio Manager and Certified Financial Planner and Founder of Hoffman Private Wealth Group where I am a Managing Director and Wealth Advisor at Steward Partners.

Thank you for joining us.I’m here with my co-host, and Wealth Advisor, Jenna Makras. 
 
Jenna: Hello everyone, and thanks for joining us as we wrap up the year. Todd, how was your Thanksgiving last week? 

Todd: Last week was a whirlwind, we travelled to my brothers 70th birthday party, my Nieces wedding and it was Thanksgiving. It was a great week.

How about you? How was your camping trip to girl scout camp?  

Jenna: So fun, except for sleeping in a tent on the ground part. Thanksgiving with my family was great also.

So, Todd, let’s start with the markets. November turned out to be a volatile month. Why the volatility after things have been going so well? 

Todd: While it is never fun to see the market go down, it is not unexpected to see the markets consolidate after a big run like the one we experienced since March.

There are three reasons. First, the Feds made comments in November signaled fewer potential rate cuts in 2025 and 2026 which caused Panic to the markets expecting more aggressive rate cuts.

Second, even while many companies were reporting record earnings, guidance and some analysts became more cautious. This was particularly the case for the red-hot Technology and AI sectors.

Third, according to FactSet, global economic data softened with weakness from tech- heavy South Korea and Taiwan and weakness from low oil prices in the Middle East.

Jenna: Todd, did everything go down, or did some sectors move more than others?

Todd: According to FactSet, from April to November, Technology, Communication Services and AI related companies led gains on the way up. This flipped in November, and these same areas suffered the largest drawdowns.

Also, previous leaders Consumer discretionary and Industrials were also under pressure.

Energy and Healthcare were not pressured for a reversal having limited gains going into November.

Utilities that did not have nuclear power remained stable for the same reason but Utilities with Nuclear and who had big gains expecting to benefit from AI were under pressure.

Jenna: What about bonds?

Todd: Again, according to FactSet, Bond yields moved higher in early November but experienced a lot of give and take with changes in interest rate expectations. Mortgage rates dropped slightly mid-month but ended higher.

Jenna: What about Commodities?

Todd: Oil remained about the same and Gold pulled back after strong earlier gains. The moves in Oil and Gold movements align with shifts in inflation and interest-rate expectations.

Crypto currencies ended significantly lower and seemed to sell off with Nasdaq clearly going against the argument that Crypto is a non-correlated asset to the equity markets.

Jenna: How did the International Equity markets perform in November?

Todd: According to FactSet: The Developed International Markets (ex- US) had modest gains of less than 1%. The Emerging markets were down about 1.2%.

Jenna: As we head into year-end, what risks are you watching?

Todd: I am looking for the areas which outperformed April through September to regain leadership but there is risk if in the 4th quarter earnings don’t look as attractive, however, I think this is unlikely.

Another area of potential risks is continued political and fiscal uncertainty. While the government is finally back to work, none of the underlying issues which caused the shutdown to have been resolved and it’s possible we will see another shut down next year.

Finally, the economy could also heat up and keep the Fed from cutting rates at all and this would keep volatility higher for longer.

As always, I will continue to monitor these concerns and act as needed.

Jenna: I know you already addressed this in part, but some Clients have been asking if the recent pullback could lead to a “large” correction.

Todd: Yes, it could, but I believe the recent pullback is no more than a normal intra year, garden variety pullback, no more. In fact, I think there is a silver lining, and it has again presented a compelling short-term buying opportunity. Moreover, if you were invested somewhere else and you missed the gains this year, or if you have cash on the sidelines, I would be a buyer now before this opportunity passes. 

Jenna: Looking at 2026, what else does your crystal ball say?

Todd: My current outlook for 2026 is Moderate economic growth with an extra push from the new big Trump Tax Bill passed in 2025.

I think we will see interest rates move slightly lower and the new Federal Reserve Chairmen who will be picked by President Trump and put into place in May will be aligned with Trumps wishes for a looser money supply and lower interest rates which will be another driver of market returns.

I expect corporate earnings to benefit from this and to see renewed optimism in the AI trade as well as spending on defense to develop new war technologies like the Iron Dome and the restocking of missiles for us and our allies. I think areas like Robotics, Drones and Nuclear power will also be beneficiaries.

I expect large cap to lead but with lower interest rates, we will also see a catch-up trade on small- and mid-cap companies.

This outlook could become more negative as new data comes in, but for now, I think you can look forward to a multiyear continuation of this long-term Bull Market.

Jenna: Do you have any reminders for year-end planning?

Todd: Sure, important ones! If you haven’t taken your Required Minimum Distributions, please do so now.

If you’re giving it to charity and your over 70 1/2, consider Qualified Charitable Distributions from your IRA. Remember, let us know so we can pay the charities directly for you to be able to take advantage of this deduction.

Also, a lot of people are going to have larger tax bills this year – Maybe consider opening or adding to a Donor-Advised Fund.

Also consider Roth conversions, but they must be completed by December 31 which means we need to start the process within the next week.

And make sure your retirement plan contributions have been made for 2025.

Our team can assist with all of these, please reach out to us if you have any questions.

Jenna: Todd are there any additional thoughts you would like to share about year end?

Todd: We’ve generated strong gains in 2025, so if you want to confirm you’re prepared for any tax payments, let us know and we’ll review your situation. We’ll still look for sensible loss-harvesting opportunities before year-end, though most positions are up meaningfully, so offsets may be limited. While no one enjoys taxes, they do come from successful investing.

Jenna: Todd, no jokes for us this month?

Todd: Ok, if you insist!

I told my accountant I was making big moves before December 31st. He said, that’s Smart. Most people only get aggressive at year-end when they’re fighting for a parking spot at the mall.

Jenna: Oh, why did I ask? 

Todd: So, why aren’t Santa’s reindeer panicking during this year-end volatility?

Jenna: Why?

Todd: Because they’re used to flying through storms, ignoring the noise, and watching their portfolios finish the year flying high.

Jenna: I like that one! Thanks Todd and thank you to all our listeners. I Wish everyone a Merry Christmas, a Happy Hanukkah, or whatever you celebrate — and a New Year filled with love, health, success, and profitable markets.

Todd: We also appreciate the trust you place in our team. Be safe this holiday season and thank you for listening to our December Podcast. If you enjoyed our Podcast, please share it with a friend.