A Letter From the President: State of the Union

Kaizen Team |
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Market Review
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As we close the book on 2025 and look ahead to 2026, I wanted to share a brief “State of the Union” update—what we’re seeing in markets, what we’re watching, and how we’re positioning client portfolios at Kaizen Financial Advisors.

Here’s the big takeaway: 2025 rewarded disciplined investors—especially those who stayed globally diversified and avoided concentrated bets. That same mindset could matter even more in 2026.

 

2025: A Strong Year — And Not Just in the U.S.

One of the most important stories of 2025 was this: international markets outpaced the U.S.

Developed international and emerging markets both delivered standout returns, and investors with global exposure benefited meaningfully. This is exactly why we build portfolios to include the full global opportunity set—not just what’s familiar, and not just what’s in the headlines.

 

A Quiet (But Important) 2025 Story: The Declining U.S. Dollar

Fixed income also played an important role in 2025. Bonds delivered strong, broad-based positive returns, with the Morningstar US Core Bond Index finishing the year up approximately 7.12%—its best performance since 2020.

Elevated starting yields, combined with falling interest rates, were key drivers of performance. As we head into 2026, we continue to view fixed income as an important part of portfolio construction—not just for stability, but also for income and long-term risk management.

 

Kaizen Update: Investing in the Client Experience

Another essential part of our “State of the Union” isn’t market-related at all—it’s Kaizen-related.

As we look ahead to 2026, we’re continuing to build our team and strengthen our internal systems to deliver an even better client experience.

That means:

  • More consistent, high-quality deliverables
  • Improved workflows and internal processes
  • Sharper coordination with CPAs, estate attorneys, and other outside vendors
  • Additional proactive planning touchpoints (including quarterly market reviews with our co-investment manager, and the Kaizen podcast)
  • Better tools and systems that reduce friction and improve responsiveness

Because when the market gets choppy—or when life throws a curveball—we want you to feel the difference: you’re supported by a team that is powerful, knowledgeable, and nimble. We move quickly, communicate clearly, and stay focused on what matters most—helping you make smart decisions with confidence.

 

2026: What We’re Watching Closely

As we look ahead, here are three themes shaping portfolio decisions and planning conversations:

1) Concentration Risk in the U.S. Stock Market

The U.S. market has become extremely top-heavy. A relatively small number of mega-companies now account for a large share of the S&P 500. While that can work for a time, it also increases risk. Diversification matters even more in this kind of environment.

2) Speculative Assets (Bitcoin, Crypto, Gold & Silver)

Some investors are increasingly asking about speculative assets—most commonly Bitcoin or crypto, but also gold and silver.

Whether these belong in a household portfolio depends on goals, preferences, and risk tolerance. But the key is this: these assets behave differently than traditional stocks and bonds—and they can be far more volatile and emotionally challenging to hold.

  • Bitcoin and crypto can experience huge price swings and drawdowns, often much larger than equities.
  • Gold and silver are sometimes viewed as “safe havens,” but they are unpredictable, can go through long periods of underperformance, and do not generate income the way stocks (dividends) or bonds (interest) do.

We’ve also seen a real-time reminder of this recently: even areas that have been “hot” can drop quickly—whether that’s tech stocks, gold, silver, or crypto. That doesn’t mean they have no role in a portfolio, but it reinforces the importance of sizing these positions appropriately.

If clients choose to hold any of these, we believe they should be treated as a speculative allocation—something that may play a role in diversification or personal conviction, but not a foundational building block of a long-term plan.

3) Global Bond Yields Are Still Attractive

One of the most underappreciated opportunities today is in fixed income—especially outside the U.S.

Yields remain relatively high, and in some cases intermediate global bonds (ex-U.S.) offer yields comparable to, or even higher than, U.S. core bonds. We continue to evaluate global fixed income opportunities thoughtfully as part of a broader allocation strategy.

 

What This Means for You

At Kaizen, our approach remains consistent:

  • Diversify globally.
  • Design portfolios intentionally.
  • Avoid concentration risk.
  • Focus on long-term outcomes—not short-term noise.
  • Manage taxes and risk as actively as we manage investments.

We are your financial advocates—so no question is too big or too small. We’re here to help with the full range of life’s money moments: retirement, college planning, and the harder stuff too—death, disability, and gifting.

As we gear up for our annual meetings we look forward to reviewing your progress and celebrating what you’ve accomplished. If something comes up sooner, or you’d like to meet at a specific time, just let us know—we’ll do our best to accommodate your schedule.

Thank you for your trust in Kaizen Financial Advisors. We’re grateful to serve you, and we’re ready for whatever 2026 brings.

 

To Your Prosperity,

Laurie Klein, CFP®, ChFC®
President & CEO
Kaizen Financial Advisors, LLC 

 

 

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