As we turn the page to a new year, many investors naturally look back on the previous 12 months and wonder what the year ahead will bring. The markets of 2025 offered plenty of reminders, some reassuring and some humbling, about how investing works. At Northstar, we believe these moments are valuable opportunities to refocus on what truly matters in long-term financial planning.
Volatility Is Normal, Even in Growth Years
2025 reinforced a familiar truth: Markets can rise overall while still experiencing meaningful ups and downs along the way. Short-term swings are not red flags; they’re part of the landscape. When we plan portfolios, we assume and prepare for volatility, not avoid it, because history shows that staying invested through the turbulence is often rewarded.
Economic Headlines Don’t Tell the Whole Story
Inflation reports, election-year coverage, interest-rate speculation, geopolitical events—2025 had no shortage of attention-grabbing headlines. Yet the market often responded in ways that surprised even seasoned observers. This reinforced an important idea: Markets digest far more information than any single headline captures. Reacting to news in real time rarely produces better outcomes than following a disciplined strategy.
Diversification Still Works
One of the clearest lessons from last year is the continued value of owning a wide range of investments. While some asset classes outperform at various points, leadership shifts throughout the years. A diversified portfolio helps smooth out the ride and position investors to benefit no matter which part of the market is in favor. On the other hand, trend-chasing remains an unreliable strategy.
Interest Rates Matter, but Not Always in Predictable Ways
Investors spent much of 2025 focused on interest-rate movements and Federal Reserve commentary. While rates certainly influence borrowing, spending, and corporate earnings, the relationship between rate changes and market performance can be far less linear than many assume. Last year was a useful reminder that markets often look ahead and sometimes move counter to expectations.
What We Can Predict in 2026
While we can’t know which headlines will move markets more than others, or which sectors will lead, there are a few durable principles we can count on:
A long-term, well-thought-out plan beats short-term predictions.
Disciplined rebalancing helps keep risk in check.
Tax-aware investing adds value regardless of the market environment.
Regular check-ins help ensure your plan reflects your life, not just the markets.
These are the levers that matter and the ones we can actively control.
What We Can’t Predict
No one can reliably forecast:
Which asset class will outperform in any given year
How markets will react to next month’s headlines
The exact path of interest rates or inflation
Short-term market swings
We can make informed, evidence-based decisions, but not precise predictions.
Looking Ahead with Confidence
As we step into 2026, our focus at Northstar Financial Planners remains the same: helping you make thoughtful, informed decisions that support your long-term goals. The markets will do what they always do. They’ll move, surprise, and eventually reward patient investors. Our job is to help you stay the course with confidence.
If you’d like to review your plan and investment strategy for the year ahead, we’re here to help you begin 2026 on a strong footing.