Dear Valued Clients and Friends –
As mentioned last week, this will be the last communique of 2025 (Dividend Cafe or otherwise). With the Christmas holiday this Thursday, New Year’s next week, and all the “end of the year” activities that go therewith, we are turning our focus to the 2026 launch. That will include:
- Monday, January 5 – the first Monday Dividend Cafe of 2026
- Wednesday, January 7 – the first client-only Weekly Portfolio Holdings Report of 2026, with a special video summary (and total recap of 2025)
- Friday, January 9 – the first Friday Dividend Cafe of 2026, the annual Year Behind, Year Ahead white paper
And in the meantime, enjoy all the last few days of 2025 have to offer you and yours! ‘Tis the season …
Dividend Cafe, this last Friday, looked at the first 25 years of this new century, and what the major investment lesson surely is. The written version is here (my favorite), the video is here, and the podcast is here.
Off we go …
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Market Action
- Markets opened up today and stayed at varying degrees of up throughout the day.
- The Dow closed up +228 points (+0.47%) with the S&P 500 up +0.64% and the Nasdaq +0.52%
*CNBC, DJIA, December 22, 2025
- Rumors that markets have a seasonal trend one way or the other have been greatly exaggerated. Actually, it is just flat out untrue. Sometimes up; sometimes down – like all calendar-oriented market nonsense.
- With some hand-wringing about Japanese bond yields moving higher, it is worth noting that their equity market doesn’t seem to care (86% of the Nikkei is above its 200-day moving average).
- Global bond yields are higher, but the U.S. 10-year has stayed below 4.2% and the U.S. bond market has had a remarkable year for total return.
- The ten-year bond yield closed today at 4.16%, up one basis point on the day.
- Top-performing sector for the day: Materials (+1.35%) and Financials (+1.25%)
- Bottom-performing sector for the day: Consumer Staples (-0.41%)
- Apollo pointed out that a 60/40 stock-bond index account in 2019, untouched since then, would now be 80/20 based on relative market moves since then. This is essentially why we believe in annual rebalancing, and why those who don’t do it risk waking up one day with a very different risk profile than what they thought they once had. I would add, though, that not only is rebalancing a way to deal with relative asset class performance over periods of time, but what is inside those asset sleeves has changed a lot, too. “Mag 7” exposures alone are well more than double what they were within the index, as top-heavy concentrations have intensified. This subject was actually one of my favorite Dividend Cafes of 2025.
Public Policy
- Expect one of the biggest public policy debates of 2026 to be the status of data center zoning and entitlement, with federal attempts to override state and local preferences. This could get juicy.
Federal Reserve
- We are going into the final week of the year with an 80% chance that the Fed leaves rates where they are at the January meeting, and a 65% chance that they will be 25, if not 50, basis points lower when Powell’s term ends in May.
Oil and Energy
- WTI Crude closed at $57.94, up +2.5% on the day.
- Midstream was down -1.5% last week, and oil was down -2.2% and natural gas -5% as the whole energy complex dropped a bit
- It is worth pointing out that midstream will end 2025 with its fifth consecutive year of positive performance, which I think is something virtually no other sector on the planet can say.
Ask TBG
| “Is it time to move into gold or other precious metals as a hedge against inflation and a bursting of an equity bubble? Or do the currently relatively high prices of precious metals mean these, too, are in a bubble? More generally, how worried should we be about a significant weakening, sudden or otherwise, in the dollar?” ~ Rich G. |
There are a few different problems here:
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On Deck
- We will see you back in the Dividend Cafe on Monday, January 5 …
- And set your calendars now for the annual Year Behind, Year Ahead Dividend Cafe on Friday, January 9.
From me and my house and from all of TBG, to all of you, Merry Christmas, and Happy New Year!
With regards,
David L. Bahnsen
Chief Investment Officer, Managing Partner
The Bahnsen Group
www.thebahnsengroup.com
The Dividend Cafe features research from S&P, Baird, Barclays, Goldman Sachs, and the IRN research platform of FactSet.
