Tending the Garden into 2026: Q4 Commentary

If you asked me to describe a perfect day, I’d probably place myself in the garden. There’s something grounding about the warmth of the sun and the feel of dirt on your hands as you try to create the right conditions for things to grow. Anyone who has spent time tending a garden knows that growth rarely follows a clean or predictable schedule. Some months bring blossoms. Others bring unplanned weeds. And every so often, a plant you had quietly written off comes back on its own.

You water, prune, wait, and watch. The process isn’t tidy, and much of it sits outside your control. Still, over time, it creates meaning.

In 2025, I found myself returning to those lessons from the dirt more often than usual.

December closed the year with a familiar late-cycle mix: moderating inflation, a supportive Federal Reserve, and resilient equity markets. Investors welcomed another rate cut without unsettling expectations for a “soft landing” in 2026. Even with plenty of unknowns still in the soil, markets continued to grow.

Signs of a Broader U.S. Market

For much of the year, large U.S. technology and AI-linked companies led the charge. They contributed meaningfully to returns, but the growing concentration in a handful of names required careful attention. As the year closed, other parts of the market began to show signs of life. This broadening felt healthier—less dependent on a few fast growers—and we’re hopeful that trend carries forward.

International Markets in Bloom

International markets posted one of their strongest years in more than a decade. Developed Europe and Emerging Markets outperformed notably, particularly early in the year. As the U.S. dollar eased from historic highs, U.S. investors in foreign equities received a helpful currency tailwind. Looking ahead, we continue to evaluate economic resilience abroad, geopolitical tensions, and where durable opportunities may exist for U.S. investors.

Bonds Played a Meaningful Role

Inflation cooled, unemployment edged higher, and the Federal Reserve described the labor market as moving toward better balance. That backdrop allowed the Fed to deliver its third consecutive 25-basis-point cut in December, bringing the federal funds target range to 3.50%–3.75%. Lower rates lifted bond prices, and bonds once again contributed meaningfully—quietly doing the job they are meant to do in diversified portfolios.

As we move into 2026, the Federal Reserve will likely remain part of the conversation. Most successful market economies rely on an independent monetary authority, and we’ve been encouraged by the Fed’s measured approach so far. History reminds us that when inflation and employment move in opposite directions, missteps can create unnecessary chaos. Economically speaking, it’s often better for the Fed to be a little late than too early. We continue to expect a data-driven, deliberate approach to future rate decisions.

Looking Ahead to 2026

On January 1st of 2025, if you had asked me the odds of ten inches of snow in New Orleans, I would have laughed. Twenty-one days later, we were hauling flowerpots inside and covering garden beds with tarps.

Gardening—and investing—has a way of humbling our forecasts. The work isn’t about predicting every outcome; it’s about building an environment that can endure whatever arrives.

As we look to 2026, we’ll continue to run diversified portfolios, align strategies with time horizons and risk tolerances, and make adjustments as conditions evolve. We’ll embrace volatility when it appears and remain focused on the long term. In keeping with our mission of Bringing Together Money and Meaning, we’ll continue tending portfolios thoughtfully and allowing time to do its work.

Snow or sun, we’ll keep showing up—creating space for the garden to grow.

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