A Little Belief: 4th Quarter Commentary

The other morning, I sent my son on a simple mission: find the Cheerios in the pantry. A few minutes later, he marched back, totally convinced we were out. I gave him a reassuring smile and said, “No way, buddy. Go check again.” So off he went but returned even more certain this time, declaring, “No Cheerios.”

I stopped, dropped to his eye level, and said, “James, there is this secret in life that, if you learn it early, will take you a long way. Are you ready?” he nodded. “You cannot see what you don’t think is there.” He looked at me skeptically. “I need you to believe the Cheerios are in that pantry and look again.”

A minute later, he returned holding the box of Cheerios. “They were there the whole time,” he admitted sheepishly.

Belief is a funny thing. It can change how we see the world.

With stock markets near all-time highs, I’ll admit, it feels a little like James coming back with the Cheerios. As advisors, we are true believers in the market. We preach its powers and believe deeply in its generative power. Last year, this faith was rewarded:

• Generative AI led the charge to an exceptional stock market year, with the MSCI ACWI net Index returning 17.49% and the S&P 500 Index returning 25.02%.
• Inflation began normalizing without a recession, and the Federal Reserve lowered rates, signaling a soft landing that many doubted possible.
• The bond market had its ups and downs, with the Bloomberg Global Aggregate Total Return Index ending the year down -1.69%
• The presidential election stirred up market enthusiasm that pushed a stock market rally, but the bond market was down on renewed tariff-induced inflation fears.

While the long-term is easier to believe in, I’ll be honest: the day-to-day can bring doubt. We aren’t blind to the challenges of the year ahead:

• Generative AI, which makes up a significant portion of the US investable market, will need to navigate rapid expansion, power/infrastructure constraints, workflow integration, and geopolitical risks.  
• Eyes will be on President Trump’s tariff policy as he navigates inflation and geopolitical pressures.
• Fiscal policy will be scrutinized as spending and the debt ceiling will be prominent, early-year topics.
• The stock market will be working off high levels, a very different starting point than the down market that brought in 2024.

But here’s the thing—belief is not about ignoring those challenges. It’s about trusting the process, even when the immediate future feels uncertain or daunting. When my son couldn’t see the Cheerios, he doubted their existence. The same happens in investing. It’s easy to focus on the immediate obstacles, the fears, and the unknowns. But when we zoom out and take the long view, we begin to see the bigger picture.

Doubt, much like the pantry, has a way of hiding opportunities until we believe in their potential. Whether it's through the innovation of generative AI, the resilience of global economic systems, or the cyclical nature of markets themselves, there is a fundamental principle that we hold close: over time, we believe in the market’s ability to adapt, grow, and create value.

We’ve seen this throughout history, from periods of deep uncertainty to moments of explosive growth. It’s tempting to focus on the noise—the immediate challenges or market volatility—but the true power of investing is rooted in patience, strategy, and trust in long-term outcomes. If we look back on 2024, those who maintained their belief in the market’s trajectory were rewarded.

As we enter 2025, the markets may face new challenges, but we believe wealth is built by those who keep the faith during turbulent times. We are committed to guiding you with this long-term perspective. Because much like James learned, the Cheerios were there the whole time—the opportunity is present, even if it’s hard to see in the moment.

So, in 2025, here’s to continuing our journey—facing the challenges ahead and keeping the faith.

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The S&P 500 Index is a market capitalization-weighted stock index. It is comprised of about 500 stocks of the largest capitalization companies that are traded on U.S. stock exchanges.
The MSCI ACWI Net Index measures the performance of large and mid-cap companies across 23 Developed Markets and 27 Emerging Markets. The MSCI ACWI® Net Index subtracts foreign taxes applicable to US citizens.
The Bloomberg US Aggregate Bond Index measures the return of investment grade debt across the US market.
All returns are reported assuming that interest, capital gains, and dividends are reinvested.
Past performance is not indicative of future results.

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