January’s blog is a little late—but that gave us time to digest how 2025 actually ended.
It was the third straight year of double-digit growth, and only two of the Magnificent 7 beat the S&P 500: Apple and Nvidia. That’s a healthy sign—this bull run is broadening, not just riding a handful of tech stocks. International markets also outperformed, and bonds finally contributed in a meaningful way.
AI: Bubble or Boom?
AI is still the big question. So far, it looks more like a boom than a bubble. Valuations are around 28–29x earnings, far below the tech bubble era near 70x, and earnings have grown double-digit since 2023. Adoption is accelerating, and major AI players aren’t showing the kind of leverage you usually see in a frothy market.
The Disconnect
Markets are near all-time highs—even as geopolitical risk rises. And that’s where the disconnect shows up:
Wall Street looks great.
Main Street feels… off.
Even with solid portfolio performance, consumer sentiment remains gloomy. The “misery index” (inflation + unemployment) isn’t historically extreme—but people still feel squeezed.
Why? Because costs that matter most—especially housing—have risen sharply since 2022. Lower and middle earners feel the drag, while higher earners and asset owners have been better positioned to keep spending. It’s easy to feel frustrated in a split economy like this.
What Helps Most
When the world feels unstable, the best move is to focus on what you can control:
your plan, your spending, your savings, and your emotions.
The people who feel this stress less aren’t ignoring reality—they’re organized enough to respond to it.
Want Help Getting Dialed In?
I’m starting a virtual class for anyone who keeps saying, “I need to get better with money.”
If you’re interested, email us and we’ll send the details.
Stay focused, stay flexible, and stay ready to adjust—because this year is already moving fast, and January isn’t even over yet.
Yours in staying financially dialed in,
Cynthia Luna