Asset Management
12/22/2025 Market Strategy
December 22, 2025
Key Takeaways
The old admonition to “never say this time it’s different” comes to mind as the development and adoption of artificial intelligence is potentially a watershed moment of change in technology.
We are reminded of the industrial revolution over two hundred years ago that changed everything that came before it when it came to how people worked, where they resided, and how they lived.
We remain favoring stocks over other asset classes while remaining diversified across asset classes
Periods of time that saw advances in canal design, the steam ship, the railroad, the automobile, and the airplane profoundly challenged the equation of transportation and once again changed how and where people lived, did business, and where they sourced the things, they needed.
The atom bomb changed the world in many ways not only of how war could be waged but the need to avoid it, and raised the level and value of negotiation and peace -making.
The Salk vaccine for polio and others like the COVID-19 vaccines as well as a multitude of other medicines and medical equipment changed the outcome of many illnesses.
Birth control changed population growth with previously unexpected demographic outcomes in a wide number of countries challenging population growth.
Monetary policy in the US has undergone a revolution with increased transparency and communication among policy makers and the constituencies they serve.
The internet changed communications as the world gained an information highway deeply embedded in the lives of both business and the consumer.
A tech off-shoot, social media, changed relationships and social mores among individuals personally, politically, and in a host of other ways.
The telephone introduced in the nineteenth century similarly revolutionized communications and the world. Morphing from a brass -cranked phone with a party line operator to the rotary dial phone and then to “touch tone” phone to cell “brick” units to diminutive in-palm handsets to today’s hand-sized smartphones.
It’s not that everything changes but some things actually do and they have impact on some things one would never think of.
Technology has always been a disruptor as well as a boon for both businesses and the consumer. From Main Street to Wall Street to Washington, DC, we’re all on the upgrade cycle whether we like it or not. Not just this cycle but in cycles long ago and into the future.
Basically, keep an open mind to change and have sources of context about what came before to help best position one’s portfolio. The fact that the stocks in the Mag 7 have been responsible in the last year for nearly half of the market’s performance itself is likely to change. This should come as the companies and customers that this “mega” group serve incorporate advanced technology in their own practice of doing business.
We regard it important to recall that the tech genie has never gone back into the bottle it came from but rather morphs to accommodate for further developments, offset failures of methodology, as well as to comply with regulations from government s that keep it contained to a degree.
For investors and traders, we suggest they avoid missing the signal for the noise in the day-to-day machinations of rotations and rebalancing that are quite natural as progress takes the wheel.
We remain favoring stocks over other asset classes while remaining diversified across asset classes.
In stocks, the eleven sectors that include: cyclicals (companies most sensitive to economic growth), defensives (companies that deal in those things we can’t do without —food, medicine, etc.), growth companies (those that grow earnings at a faster pace than others) and growthier value companies (companies outside of tech that use technology to gain or maintain a value premise that makes them more efficient and attracts the loyalty of its shareholders.
The market in 2026 in our view will carry forth as it has for as long as we can remember -- looking for a way to climb “the wall of worry.” This proverbial wall that stocks find is “always there” to challenge corporate plans as well as emotional overshoots like irrational exuberance, greed, and fear.
What tends to drive stocks higher fundamentally in our view is a combination of revenue and earnings growth driven by innovation to provide greater efficiencies (productivity).
The market in our view over the last eighteen years or so has been increasingly needs -driven by investors seeking ways to augment Social Security which as an institution does not appear likely to provide anywhere near as much of one’s retirement income as it may have for earlier generations.
As a result, increased demand for quality stocks that stand out and garner investor interest may well be reflected in P /E multiple expansion that in this cycle has been higher than in most other cycles as the price that investors are willing to pay for corporate earnings rises.
With Americans and other folks around the world expecting increased life expectancy and a need to maintain a standard of living they had worked hard to achieve over the years that they labored, many have raised their exposure to stocks.
While past performance is no guarantee of future success, quality businesses with good management and workers have earned the interest of investors at this juncture on the investment time line.
We’ll be back in the New Year
As we prepare to enter 2026, we’ll share a number of slogans we have found useful over the course of four decades in the day to day of the markets:
Equity markets in the US will close early at 1PM on Wednesday.
Before the market winds down ahead of the holiday there will be some key economic data on Tuesday that includes Real GDP for Q3; Industrial Production for October and November and Durable goods numbers for October.
See you in the New Year!
Chief Investment Strategist, Oppenheimer Asset Management Inc.
John is one of the most popular faces around Oppenheimer: our clients have come to rely on his market recaps for timely analysis and a confident viewpoint on the road forward. He frequently lends his expertise to CNBC, Bloomberg, Fox Business, and other notable networks.
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