January 12, 2026

We are happy to report on another successful year in our plan for the pursuit of your most cherished financial goals. Our plan, and therefore your portfolio, continue to be driven by these goals, rather than by any prognostication around the economy or the markets. That will be the case, throughout the coming year, and beyond. 

We will start by restating some of the core beliefs that guide our planning and investment approach, and then offer a few comments about the economic/financial backdrop.

General Principles:

• We aim to be long-term, goal-focused, plan-driven investors. Our core investment policy is to pursue your goals by investing in a diversified portfolio of companies.
• Specifically, we aim to invest in companies which have a 10-year history (or longer) of paying a dividend to investors which has increased by at least 10% per year on average. We believe dividends are a window into the financial soul of a company, and that a history of increasing dividends can be one of the best indicators of its financial strength (and potential growth in value).
• We believe that the economy cannot be consistently forecast, nor the markets consistently timed. Moreover, we find no predictable pattern in the way markets react to—or choose to ignore—economic developments.
• We conclude from these beliefs that the only way to be reasonably confident of capturing the premium return of equities is to ride out their frequent, sometimes significant (but historically always temporary) declines. 
• We do not react to, much less try to anticipate, economic and/or market events. As long as your long-term goals remain unchanged, so will our plan for their achievement. And as long as our plan remains constant, so will your portfolio strategy.
• We believe that long-term compounding of equities is the most important force guiding us toward the achievement of your goals.

Current Commentary:

• In 2025, the broad equity market completed its third straight year of double-digit returns, driven by a strong economy and significantly increased corporate earnings. Most analysts forecast continued growth in earnings and profit margins in 2026¹.
• The single important weak spot has been the employment picture, which has continued to soften. But even this has its significant bright side: strong economic growth and a flattish employment situation mean that per capita productivity has been rising strongly. 
• After six straight rate cuts, Federal Reserve monetary policy is 1.75 percentage points looser than it was 18 months ago². It seems more than reasonable to expect the lagged effects of all this easing to begin showing up in 2026.
• The middle class in particular is set to enjoy tax refunds this filing season which have been variously estimated around $150 billion³. This would seem to be a potentially meaningful near-term economic tailwind.
• There can be no question that the broad equity market is more heavily concentrated in a few huge tech stocks than it’s ever been in our investing lifetimes. And that this concentration has the S&P 500 Index selling at historically high valuations. 
• Our response to this is twofold: First, to “keep our defense on the field,” which is another way to say that we are currently heavier in cash in our OMEGA portfolios. This cash helps to buffer our portfolio against sudden, steep declines in the market. It also provides us with funds necessary to take advantage of a downturn in the market if there happens to be one. 
• Second, we strive to remain sufficiently invested so that we do not miss out on the growth that may be ahead of us. This potential growth is vital to keeping up with the rising cost of living, so that our ultimate goal may be realized... that is, to live our lives with independence and dignity.
• The next significant market shock—and there usually is one; they come along with almost the frequency of the crosstown bus—will probably come out of deep left field. And like the shocks past, it will have very little to do with us, other than as a potential bargain-hunting exercise. 
• We are following an equity-focused plan that has “worked” in the very long run, in that it has achieved the goals of investors like us. We do not accept that “this time is different” regardless of what “this” may be at any given moment. And thus, we don’t adjust our strategy to accommodate the fads or fears of that moment. We don’t go to all cash during market panics, and we don’t bet the ranch on “new era” miracles… like AI.

We wish all our friends and clients—because to us they’re the same thing—a healthy, happy, and prosperous 2026. We’re always here to address your questions and concerns. We appreciate you being our clients. It is a privilege to serve you.

Warmly,

Scott Shulman                                        

Managing Director 

Peter Gwynn-Sackson

Financial Advisor 

Lawan Lee

Sr. Client Service Associate