Stock markets advanced again in November. International stocks were up most, followed by US small-cap stocks. Bonds and US large-cap stocks also increased. Year to date, all four asset classes have gone up significantly.
Investor Thanksgiving
Happy Holidays! We hope you had a wonderful Thanksgiving. As investors, we have a lot to be grateful for, including:
- Current Market Environment – Overall, it’s been a fantastic year for investors. Every day, we monitor returns for almost 40 different investment funds and market indexes, which follow almost all of the publicly available asset classes. Year to date, all of them are positive. Studies have shown that the pleasure derived from making money is much less intense than the pain that comes from losing money. So, it’s a great time to enjoy this year’s gains.
- Diversification – Specifically, investors who hold international stocks have reason to celebrate. Here are the annual returns for the four market indexes that we track at the top of this article:
As you can see, results are different each year, and performance leadership rotates amongst different investments. But recently, US stocks have outperformed international stocks more often than not. And after enduring a tough relative year in 2024, international stocks have led the way in 2025. In the short term, staying diversified can be challenging. We all want more money invested in the best-performing funds. But over time, patiently diversifying pays off for investors by increasing their returns and lowering the volatility of their portfolio.
- Tax Efficiency – Investments and taxes go hand in hand. Knowing your current tax situation gives us the ability to analyze which type of account makes the most sense to fund or distribute from, when to harvest losses, and the optimal time to realize gains. Minimizing taxes over time means higher amounts of money for your financial goals.
- Exchange Traded Funds – ETFs are the most popular financial products available and continue to attract inflows of money every year. Many have low ongoing expenses and are easy to trade throughout normal market hours. Typically, they also minimize taxable distributions, which gives investors higher levels of control over when they realize gains and pay applicable taxes.
Investing requires optimism – the belief that the future will be better than the present. And gratitude helps build the optimism we will need for the challenges ahead. As your advisor, we are thankful for the opportunity to work with you.
