The December 2025 Trending Report reflects on a year of significant growth in the stock market, with the S&P 500 finishing up approximately 18%. Kevin Roskam begins by asking a thought-provoking question: if investors had known this outcome in January, how would they have felt during the year’s volatility? The answer underscores the importance of perspective and patience in long-term investing. While short-term swings can trigger emotional reactions, a disciplined approach rooted in formulaic investing helps investors stay the course and avoid impulsive decisions.
Throughout the year, markets experienced notable fluctuations, including downturns in April and sharp movements in November. Roskam emphasizes that these periods of uncertainty highlight the value of unemotional strategies. Formulaic investing, which relies on mechanical processes rather than emotional judgment, provides a framework for navigating volatility. This approach ensures that decisions are made consistently, regardless of market noise, and positions investors for long-term success rather than chasing short-term gains.
A key theme of the report is the distinction between the stock market average and the average stock. Headlines often focus on the S&P 500 index, but most investors do not hold portfolios that mirror the index exactly. For example, information technology stocks—particularly the so-called “Magnificent Seven” (companies like Google, Amazon, and Apple)—drove much of the market’s performance in 2025. These seven stocks accounted for roughly 42% of the index’s total return, with gains of about 22% compared to the index’s 18%. However, November demonstrated how concentrated leadership can fade; technology stocks struggled, yet other sectors posted strong gains, keeping the index slightly positive for the month. This illustrates why investors should not measure success solely against the market average, as diversified portfolios behave differently.
Roskam also highlights the importance of active management in today’s environment. Correlation among S&P 500 stocks has been low, meaning individual sectors and stocks are moving independently rather than in lockstep with the index. This creates opportunities for skilled managers to add value through tactical adjustments. Active management—whether daily, weekly, monthly, or quarterly—can help portfolios adapt to changing conditions, unlike passive strategies that remain static. The report stresses that diversification should extend beyond asset classes to include time and philosophy. By employing multiple managers with different approaches and timelines, investors gain resilience against market swings and avoid overexposure to any single strategy.
November’s volatility serves as a reminder of why this structure matters. Sharp movements can trigger fear, but Roskam encourages investors to view volatility as part of the plan. Defensive strategies exist to protect against severe downturns, but they are balanced with growth-oriented tactics to capture long-term gains. This balance is central to the accounts offered through USA Financial Exchange, which combine multiple managers within a single account to deliver diversification by time and philosophy. Such an approach reduces reliance on any one decision-making process and helps investors stay disciplined.
As the year closes, trends remain generally positive despite ongoing uncertainty. Roskam reiterates that volatility and unpredictability are constants in the market, making unemotional, process-driven investing essential. Advisors play a critical role in reinforcing this mindset, reminding clients that decisions are made mechanically, not emotionally. For those unsure about how their strategies work, Roskam recommends reaching out for a review and refresher. Understanding how investments are structured provides confidence and helps investors maintain perspective during turbulent periods.
Ultimately, the December Trending Report reinforces a timeless principle: successful investing is not about predicting short-term movements but about adhering to a disciplined, formulaic process that prioritizes long-term growth. By removing emotion from decision-making and embracing diversification across time and philosophy, investors can navigate volatility and position themselves for enduring success. As Roskam concludes, these strategies offer the foundation for growth—even in uncertain times—and provide confidence as we look ahead to the future.
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The Trending Report is a monthly commentary series that explores topical trends taking place within the current market and economy. It aims to provide clarity and encourage Advisors and Investors as they navigate and make sense of current market conditions. The ongoing battle between short term emotions and the commitment to long term investing is real. This series seeks to help Advisors and Investors focus their energy on long term success. Hosted and published by the investment professionals at USA Financial, each episode offers valuable commentary and analysis into various economic factors and market movements. By tuning in, our host breaks down complex topics into easy-to-understand information.
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