Employee Stock Options: What Really Matters from Grant to Sale

Contributed by: Robert Ingram, CFP®

Non-qualified stock options (NQSOs) are a form of employer compensation that gives an employee the right to purchase a specific number of company shares at a predetermined price within a defined time period. Unlike direct stock grants Restricted Stock Units (RSUs), which provide actual shares of stock, NQSOs offer the option, but not the obligation, to buy shares in the future.

If you have access to these stock options, they can be one of the most valuable opportunities to build wealth through your employer—but they are also frequently misunderstood. On the surface, it might seem straightforward: you can buy your company’s stock at a set price and benefit from future growth. In practice, stock options involve a series of decisions that can have financial and tax consequences that unfold over time. From grant and vesting to exercise and eventual sale, each stage in the lifecycle of these NQSOs carries its own rules and implications for the value you ultimately realize.

Grant: It Starts with a Promise (Not Ownership)

When your company grants you stock options, you don’t actually receive stock. You receive something much more subtle: the right to buy stock later at a fixed price.

You’re told:

• How many options you have (number of shares you could buy)

• At what price you’ll be able to buy them (exercise price)

• When you’ll be allowed to use that right (the vesting schedule)

• And when the opportunity expires

As a hypothetical example, let’s say you were granted 4,000 options on May 1st, 2026, with an exercise price of $20 per share. The vesting schedule is that 25% of the total options vest after one year, and the remaining 75% of the options vest quarterly over the next three years. Finally, the expiration date is May 1st, 2036 (10 years from the grant date). Whoa! There’s a lot there. Let’s tackle it in stages.

At this stage, nothing has happened financially. No cash or value is exchanged. There are no actionable steps, and there is no taxation. There is just the potential opportunity that begins when your options vest.

Vesting: You Earn the Right to Act

Over time, those options that were granted “vest.” This means that the options become exercisable. The option becomes “yours,” and you can choose to exercise (or not exercise) the options (i.e., purchase shares with some or all of the vested options).

In most employee stock option plans, vesting is gradual, often spread out over a few years.

In our example above, the first 1,000 options vest one year from the grant date, so they would be exercisable on May 1st, 2027. From there, portions of the unvested shares vest each quarter for the next three years.

The following table illustrates how a vesting schedule might look, where each quarter an equal number of options vest from the end of year 1 until the end of year 4.

While this is a common type of vesting schedule, it is very important to understand your own employer’s specific vesting plan and to know when your options will be available to exercise. Until the options vest, they are not truly “yours,” and you may forfeit any future right to exercise them if you leave the employer, for example.

But here’s a key point about each vesting date: at vesting, still nothing happens financially. Vesting does not trigger taxes.

This is different from other types of equity compensation, such as Restricted Stock Units (RSUs). When RSUs vest and you receive shares, the total value of the shares at that time is considered income and would be reported and taxed as ordinary income.

When non-qualified stock options vest, there is still no action taken, and you haven’t received the value of any options, so there is no reported income or associated taxes. But now, your planning and decision-making start.

Exercising: When You Buy—and Taxes Kick In

Eventually, you reach the first decision point: do you exercise your options?

The value of stock options comes from the difference between what you’re allowed to pay for the stock and what it’s actually worth in the market.

So, from our example, let’s say you have options that have vested, and the value of the stock in the market is $45 per share. Because your options have an exercise price of $20 and you could purchase shares for $20, there is a gain of $25 per share ($45 - $20). The options allow you the opportunity to build that value without having to buy the shares outright (yet!).

Now, when you do exercise options (i.e., buy the shares) at any time up until the expiration date, this is where things change and taxes come into play.

At the time you exercise, the difference between the market value of the shares and the price you are able to pay to buy them is considered income and is reported to the IRS. In our example, if the value at the time of exercise is $45 per share and your purchase price is $20, you would have ordinary income of $25 per share.

If you exercised 1,000 shares, that would be 1,000 × $25 → $25,000 in taxable income.

Many people assume taxes happen when they sell the shares. While sales can and often do occur around the same time as the exercise, the exercise itself often triggers the biggest tax impact.

If you choose to exercise options in a high-income year, the extra income may push you into higher tax brackets. Another scenario is waiting to exercise large groups of options all at once. This could also dramatically change your overall income in that year and therefore impact your tax liability. This is why careful tax planning is an important part of managing your stock options.

Quick Note on Taxes at Exercise (and How They’re Paid)

Taxes here aren’t just reported and owed—they’re typically withheld. Employers are generally required to withhold taxes at the time of exercise. This usually includes federal taxes, state income tax, Social Security, and Medicare (FICA taxes). How is the withholding paid?

Methods for covering taxes:

• Cash payment (out of pocket) – sending payment from your bank or wire transfer to cover the taxes

• Selling shares to cover – the plan sells a portion of exercised shares to cover the taxes

  • This is the most common approach used

• Withholding shares – the plan withholds a number of shares equal in value to the taxes instead of selling shares on the market

  • This is less common for public company stock option plans

Selling Shares: Turning the Value into Cash

To fully realize the usable value of the options and shares, you would sell the shares for cash as the final financial outcome and decision.

Taxes may come into play again after you exercise and sell your shares (as capital gains or losses).

Remember, at exercise, the difference between the market value and the exercise price is already taxed as income, so the cost basis of the exercised shares becomes the market value at the time of exercise.

Cost basis in our example: if exercising shares when market value was $45 → cost basis = $45

If you were to sell those shares for $55, for example → you would have a $10 capital gain.

If, on the other hand, you sold the shares at $35 → you would have a $10 capital loss.

Depending on when you choose to sell your exercised shares, you could have a short-term capital gain or loss (if held for less than one year) or a long-term capital gain or loss (if held for more than one year). With the tax treatment differences between short-term and long-term capital gains, this again adds further tax planning considerations to your decisions.

Note: You are typically responsible for any taxes associated with these capital gains or losses, as they are not withheld by the employer plan.

From Exercise to Ownership to Selling: (How You Get There)

When you exercise your options, you’re no longer holding an option—you now own stock. There is generally no maximum holding period before having to sell, and there is no risk of losing rights to the shares if you leave the employer, retire, etc.

But there are a few methods for exercising options and turning them into real value.

• Pay in cash (hold all shares) – covering the cost of the share purchases and usually the tax withholding by writing a check or transferring funds to the plan administrator. You retain all of the shares until you decide to sell some or all of them.

At this point, you might be asking, “What if I don’t have the cash, or I don’t want to use my funds to exercise the options?”

Cashless Exercise:

• Sell some shares at exercise (hold some shares) – a portion of shares is sold immediately to cover the cost of the shares exercised (and usually the tax withholding). You retain the remaining shares.

You would then hold the remaining shares for investment until you decide to sell them.

The other type of cashless exercise is one of the most common methods for using options and converting them into usable value:

• Cashless exercise (sell everything) – you exercise options, and all the shares are sold immediately, covering the cost of shares and taxes, leaving you with cash proceeds instead of stock.

This full cashless exercise allows you to turn the value of your options into cash in one step with no out-of-pocket cost and avoids the ongoing risk of holding the stock. That can be very advantageous for many people.

However, there may be cases where exercising options to hold shares makes sense. One advantage is that potential future growth may be taxed at capital gains rates, which could be lower than ordinary income rates. Depending on your current income and expected future income, this difference may significantly impact your overall outcome.

Bottom Line

Stock options are more than just a one-time benefit. They involve a process and decisions based on many factors over several years (even a decade or longer). Small differences in timing, taxes, and personal choices at each step add up to shape your results.

As with many complex financial decisions that have tax and other implications, you should consult with your financial planner and tax advisor.

If you’ve received stock options and aren’t completely confident in how they fit into your overall plan, we’re happy to have a conversation.

Please don’t hesitate to contact us!

Robert Ingram, CFP®, is a CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® With more than 15 years of industry experience, he is a trusted source for local media outlets and frequent contributor to The Center’s “Money Centered” blog.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Center for Financial Planning, Inc. Center for Financial Planning, Inc. is not a registered broker/dealer and is independent of Raymond James Financial Services.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete. Any opinions are those of Bob Ingram, CFP® and are not necessarily those of RJFS or Raymond James. Raymond James Financial Services, Inc. and its advisors do not provide advice on tax issues, these matters should be discussed with the appropriate professional.

Finding the Perfect Mix: How to Build the Right Asset Allocation for You

Contributed by: Center Investment Department

Most delicious meals start with a great recipe. A recipe tells you which ingredients to use — and how much of each — to create something satisfying. In the same way, successful investing begins with understanding the right mix of assets that can help you reach your goals and stay comfortable along the way. Just as tastes and ingredients change or are tweaked over time, markets are ever evolving, so what has worked in the past may need periodic adjustments and thoughtful updates.

Determining the Right Mix

Asset allocation remains one of the most important drivers of long‑term investment outcomes and one of the few things investors can influence. It’s the foundational blend of stocks, bonds, and cash that shapes how your portfolio behaves, so choosing the right mix matters. This concept is perfectly depicted in the chart below, created by my colleague, Nick Boguth, CFA®, CFP®. This chart illustrates different asset allocation mixes and how they have historically produced varying ranges of outcomes. Portfolios with higher stock allocations have experienced higher best‑year returns but also greater drawdowns in worst‑year periods, while more conservative allocations (those with higher bond allocations) have shown narrower return ranges. This really highlights the trade‑off between risk and return that investors should consider when constructing a portfolio.

Now, choosing that mix may look different today than it did several years ago—it’s not static. And it might look different again in the future. To determine what will work best for you, start by answering three core questions:

1. What are my financial goals?

2. When do I need to achieve them?

3. How much will I be investing now — and over time — to support those goals?

Seasoning to Taste: Understanding Your Risk Tolerance

Even the perfect recipe can fall flat if it doesn’t match your palate. The same is true with investing. Imagine the equity market falls 20%. Would you feel tempted to sell stocks and flee to bonds or cash? Whether we like it or not, volatility has become a constant feature of today’s market environment, driven by changes in inflation, Federal Reserve policy shifts, and global uncertainty. We need to take these factors along with others, into consideration, and this is where risk tolerance comes into play. Understanding your comfort level with volatility and loss helps you select an allocation you can stick with, especially during challenging periods. When evaluating your tolerance, consider the risks and rewards associated with different investment types, how you react to market stress, how much loss you could tolerate for long term gains, and whether your emotions align with your strategy. Your feelings and behaviors matter just as much as the math.

Following the Recipe: Staying Disciplined

Just like sticking closely to a recipe produces more consistent results, staying committed to your asset allocation greatly increases your chances of long‑term success. But don’t get me wrong—it isn’t always easy!

Temptations to chase performance, react to alarming headlines, or invest in the “next big thing” are always present. Emotional responses to market swings, fear of missing out, and short‑term noise can all pull investors away from a thoughtfully designed plan, and often at exactly the wrong time. Over time, these small deviations can meaningfully change the risk and return profile of a portfolio. Several basic practices can help reinforce discipline and keep your plan on track:

• Diversification: Spreading investments across asset classes and regions can help manage risk‑adjusted returns and potentially reduce reliance on any single outcome.

• Regular Rebalancing: Periodically resetting your portfolio helps manage risk, maintain alignment with your goals, trim positions that have grown too large, and add to areas with future potential.

• Dollar‑Cost Averaging: Investing consistently over time can help reduce the impact of market volatility and remove the pressure of timing decisions.

Bringing It All Together

We believe finding the right asset allocation is one of the most important steps in building a sound investment plan. By clarifying your goals, timeline, resources, and risk tolerance, you can create a mix that works for you.

Markets will continue to change, but the fundamentals don’t. Define your recipe, understand your palate, and follow the process with discipline. A consistent approach may help support long term investment objectives.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc.

Center for Financial Planning, Inc. is not a registered broker/dealer and is independent of Raymond James Financial Services.

This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Any opinions are those of the author and are not necessarily those of RJFS or Raymond James. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment or investment decision. Investing involves risk, investors may incur a profit or loss regardless of strategy or strategies employed. Asset allocation does not ensure a profit or guarantee against a loss.

Dollar-cost averaging cannot guarantee a profit or protect against a loss, and you should consider your financial ability to continue purchases through periods of low price levels.

Q1 2026 Investment Commentary

Contributed by: Angela Palacios, CFP®, AIF®

Contributed by: Nicholas Boguth, CFA®, CFP®

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Executive Summary

• Markets faced early volatility driven by geopolitical tensions, higher oil prices, tariff uncertainty, and evolving Fed policy.

• Stocks declined modestly (S&P 500 down ~4%), while bonds were essentially flat, cushioned by higher yields.

• Oil and gold were volatile, reminding investors that even “safe haven” assets can move unexpectedly.

• The Federal Reserve held rates steady, despite market swings in rate-cut and rate-hike expectations.

• Diversification mattered—spreading risk across asset classes and sectors helped limit portfolio drawdowns.

• Long-term investors are best served by staying disciplined, maintaining liquidity needs, and avoiding emotional decisions during short-term market noise.

Volatility is a normal part of investing. A thoughtful financial plan and a diversified portfolio remain the most reliable tools for navigating uncertain markets.

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2026 is off to an eventful start, reminding us once again that volatility is a normal part of the investing journey. A wide variety of headlines, mostly geopolitical, have dominated the year so far, creating early volatility across equities, commodities, and even bonds. First, the U.S. military arrested the Venezuelan  President Nicolás Maduro and his wife, forcing a change in leadership for the country. Gold and silver surged, while defensive sectors like U.S. energy and utility stocks rallied. Shortly after, the U.S. made statements about the possibility of controlling Greenland, which strained relations with Denmark and NATO partners. Lastly, the U.S. re-entered conflict in the Middle East as war broke out in the region with Iran.  With traffic through the Strait of Hormuz restricted, global oil markets felt the impact as the price for a barrel of oil quickly spiked to well over $100 and hovered there for the remainder of the quarter.

Bonds, as measured by the Bloomberg US Aggregate Bond index, ended the quarter essentially flat at -0.05% while U.S. stocks (S&P 500) were down -4.33%. International markets and U.S. small-cap markets started the year with surprising strength, but they have given back much of those gains through March as the war escalated. Gold experienced the most volatility, rallying another 20% this year before giving nearly all of that back, and ended the quarter up only 5.7%. In our recent investment event, we discussed many of these headlines and noted that this is a midterm election year, which is usually marked by greater-than-average volatility but often ends positively.

Volatility Caused by Geopolitical Events

The above headlines can make investors want to act – maybe even sell their investments and stock up on cash under the mattress or gold bars in the safe. In times of stress, it is important to lean on history and data to guide the next best course of action. See below for stock returns 3 and 12 months after key conflicts over the past 100 years. Does the data surprise you?

Diversification and remaining invested are very important in times like these. While diversification doesn’t completely insulate you from drawdowns during the hard times, it does make them much more bearable and hopefully sets your portfolio up for a quicker recovery. Volatility is a normal part of investing. Remember, if we had no risk, there would also be no reward. It is the price we pay for long-term positive returns. Each year, volatility crops up for one reason or another, and temporary pullbacks are very normal.

2025 and 2026 have been no exception. Liberation Day (political branding of tariff policies) caused a strong market pullback around the same time last year, followed by the Iran War this year. The chart below shows the regularity of pullbacks. The blue bars (overwhelmingly positive) are calendar year returns. The orange dots show how much the market fell WITHIN each calendar year. Some years only see 3% to 10% dips. Some years see dips of 10% to 50%. The “average” intra-year drawdown since 1950 is 13.5%. Despite those dips, the S&P 500 was positive ¾ of the time and averaged 9.5% per year.

For investors with long time horizons, these moments may serve as great entry points, especially if you have additional dollars to save. For those who depend on their assets, we have an action plan in place that was developed long before this volatility began. The thoughtful planning work we do with you helps ensure you have what you need for the next 6 months, a year, or even two years, already in cash or money market, which means you don’t have to sell into market volatility.

Federal Reserve and Interest Rates

The Federal Reserve (The Fed) has faced political pressure to cut interest rates while it navigates stubborn inflation, a weakening labor market, and the economic consequences of the war in Iran. The Fed opted to hold interest rates steady at 3.5%–3.75% through its January and March meetings, even as oil‑price spikes linked to Middle East conflict complicated its inflation outlook. It is important to remember that the Fed focuses on core PCE, which strips out inflation pressures from energy and food because they are typically so volatile. Inflation fears and concerns that the Fed could raise short-term interest rates have picked up again amid the spike in oil prices. I think we all immediately remember the 1970s era of inflation when we hear that oil is getting expensive and start to worry. As of now, this spike has been short-lived, and if the Straits of Hormuz reopen soon and oil starts moving again, we should see oil prices start to come back down. Short-term spikes usually don’t flow through to core PCE inflation in a meaningful way. However, if oil remains scarce and prices remain high, you will start to see the higher energy costs leak through to other areas of the economy, which would then be reflected in higher core PCE.

The bond market immediately jumped to the conclusion in March that the latter would happen, and the Fed would be staring at rising inflation numbers, and then further assume the Fed would start raising interest rates again to combat this inflation. We think it is far too early to assume this will happen. We entered the year with bond and equity markets pricing in 1 or 2 rate cuts by the end of this year, and now the market is pricing in a rate increase before year's end. This change in expectations is why bonds have had a negative month of returns. However, it is important to note that this isn’t the start of a 2022 bond market again. Now we are starting from a place of much higher yields, and we still have a robust interest rate being paid to us every month to compensate for some volatility.

Despite market assumptions, Fed officials continue to project one rate cut later in 2026, but internal disagreement continues, and if Kevin Warsh is confirmed by the Senate to take over in May, opinions could shift. It is important to remember that no single person sets this policy. There are 12 voting members of the Federal Open Market Committee (FOMC) who determine the fate of interest rates. The Chairman is simply the public representative of this board, and the chairperson only has 1 vote like everyone else and has no veto power.

At the same time, political pressure from President Trump on the Fed continues, as he publicly called for an immediate rate cut amid market volatility driven by war. Chair Jerome Powell, nearing the end of his term, emphasized that the Fed is still assessing the impact of the Iran war, elevated oil prices, and mixed economic data, and warned that the path ahead remains deeply uncertain. With leadership transitions approaching and geopolitical risks rising, the Fed’s next move remains far from clear—fueling market anxiety and adding to the perception that 2026 has become one of the most unpredictable years for Fed policy in over a decade.

Long Term Versus Short Term Interest Rates and Mortgage Rates

While the Fed does set interest rate policy, it is important to remember that it only sets short-term rates. Intermediate and long-term interest rates are driven more by supply and demand. Many have hoped that lower short-term rates would equate to lower mortgage rates. While rates have come down over the past 9 months, they have recently (in March) drifted back upward, causing new home buyers to pause. Earlier this quarter, 30-year mortgages had fallen below 6%, but they have drifted back to the mid-6 % range, nearly halting mortgage applications.

Private Credit Fears

Over the past few years, we have gotten many questions on private credit. We are constantly kicking the tires on different investment opportunities and trying to understand if they deserve a spot in your portfolio. The allure of 10%+ interest rates and little volatility sounded very tempting, but it was the first red flag in our review. Limited liquidity also had alarm bells swirling in our heads. Usually, if something sounds too good to be true, it often is. Private credit is no exception. Many dove in, thinking there would be little volatility and a great income stream. The problem with a limited liquidity product is just that, you usually can’t access your money when you most want it. As there were notable headlines about private credit borrowers, these private credit funds faced many redemption requests that they could not fulfill. Imagine wanting to sell an investment and being told no. That fear then starts to snowball, and more investors request redemptions, snowballing the issue and the headlines. We recognized this product for what it is: for high-net-worth investors with very long time horizons who can wait out redemption limitations without needing the cash. Even then, they aren’t guaranteed to pay you a premium investment return. The headlines are likely to continue escalating around these products as barriers to selling persist and securities in the portfolios are marked down to their actual values.

Artificial Intelligence

A.I. news continues to drive headlines and move markets. Companies that are driving the technology forward continue to share new developments and innovations that can be both exciting AND nerve-wracking. There is no shortage of opinion pieces predicting what the future holds for the technology, ranging from “minor” to “world-changing”. This uncertainty has shown up in financial markets, as there is some dispersion in stock prices lately. Not everything is moving in unison…which is healthy! We would not want to see dot-com bubble-era behavior, where any stock that mentioned A.I. was immediately rewarded. Certain companies’ stock prices have fallen following announcements of large A.I. spending plans, while others have reacted positively. Demand for “chips” is driving strong earnings expectations in the semiconductor industry, but there is concern about circular spending, where companies are just paying each other back and forth, and that may not be sustainable. There has also been some major volatility among individual stock names as competitive moats come under attack from A.I. Utilities and commodities are affected as “datacenter” plans with mind-blowing power needs continue to develop.

This is a major theme that affects many parts of the market. With any innovation, uncertainty follows, and all investors can do is invest accordingly. As far as our portfolios go, we continue to monitor valuations and expectations for the stocks and bonds that are directly affected. This quarter's volatility has actually made valuations more attractive. We get the question, “Is this a bubble?” a lot…and we just don’t see it across the whole market. Sure, there might be individual companies trading at extreme valuations, but it certainly isn’t across the entire market. It might surprise you to hear that, for example, Microsoft ended the quarter in a 31% drawdown from its prior high! It is one of the largest holdings in the S&P 500, but due to performance in other sectors, the index was still only down ~4% in Q1. To us, that is yet another example of diversification (in this case, sector diversification within the S&P 500) leading to better outcomes for investors.

Tariff Update

Trump’s tariffs were another source of volatility in the first quarter. The Supreme Court ruled that a portion of Trump's tariffs, the ones imposed on specific countries, were unlawful. Trump’s initial justification for imposing those tariffs as a national “emergency” did not hold up in the Supreme Court, so those tariffs were removed. He immediately responded to this ruling by imposing new temporary tariffs of 10%, then later 15%. Ultimately, this is a fluid situation that is adding to the uncertainty in the stock and bond markets. Companies have to navigate pricing and supply chain issues arising from tariff uncertainty, and there is still the lingering question of whether tariff refunds will be paid out.

Overall, it seems we can expect tariffs to remain in place for now, which will ultimately provide another revenue stream for the U.S. government but lead to higher prices for U.S. consumers. Time will tell how these tariffs will change going forward, whether they will remain in place long-term or be used more as a bargaining chip to make deals with other countries.

Gold Crash?

Another surprising market move in Q1 came from Gold. Gold started the year continuing its growth, hitting a new all-time high of almost $5,600 near the end of January! Then it fell 20% from its high over the next month and a half, bottoming out near $4,200 on March 23rd. It rallied slightly and ended the quarter near $4,600/oz.

The market can surprise us more often than we think. Gold is often considered a “safe haven” asset, which you would expect would RALLY in the event of something like, I don’t know, the unknowns of a war in the Middle East. But that is not how gold reacted this past quarter; in fact, headlines at the very end of the quarter hinted at an off-ramp from the conflict with Iran, and gold actually rallied on the news, similarly to stocks! Not exactly the movement you would expect from a “safe haven” asset.

Gold is an uncorrelated asset for better or worse. It has been on an amazing run over the past few years and just began experiencing some volatility this past quarter. Like any asset, consider the risks before investing, and understand your unique situation and financial plan to determine if, where, and how gold might fit into your portfolio.

Thank you for taking the time to read this quarter’s investment commentary. There is a lot of noise in the markets, and we believe that a thoughtful financial plan, paired with a disciplined investment process, is more important than ever. Please don’t hesitate to reach out to your financial advisor or anyone on our team here at The Center with any questions. We’re here to help and would be delighted to have a conversation.

Angela Palacios, CFP®, AIF®, is a partner and Director of Investments at Center for Financial Planning, Inc.® She chairs The Center Investment Committee and pens a quarterly Investment Commentary.

Nicholas Boguth, CFA®, CFP® is a Senior Portfolio Manager and Associate Financial Planner at Center for Financial Planning, Inc.® He performs investment research and assists with the management of client portfolios.

Any opinions are those of Angela Palacios, CFP®, AIF® and Nick Boguth, CFA®, CFP® and not necessarily those of Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected.

The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represent approximately 8% of the total market capitalization of the Russell 3000 Index. The MSCI EAFE (Europe, Australasia, and Far East) is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the United States & Canada. The EAFE consists of the country indices of 22 developed nations. The Bloomberg Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investors’ results will vary. Investing in oil involves special risks, including the potential adverse effects of state and federal regulation and may not be suitable for all investors. Past performance does not guarantee future results. Diversification and asset allocation do not ensure a profit or protect against a loss. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Past performance is not a guarantee or a predictor of future results. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

Gold is subject to the special risks associated with investing in precious metals, including but not limited to: price may be subject to wide fluctuation; the market is relatively limited; the sources are concentrated in countries that have the potential for instability; and the market is unregulated.

Retirement Planning Challenges for Women: How to Face Them and Take Action

Contributed by: Sandra Adams, CFP®

If we are being completely honest, planning and saving for retirement seems to be more and more challenging these days – for everyone. No longer are the days of guaranteed pensions, so it’s on us to save for our own retirement. Even though we try our best to save…life happens and we accumulate more expenses along the way. Our kids grow up (and maybe not out!). Our older adult parents may need our help (both time and money). Depending on our age, grandchildren might creep into the picture.  Add it all up and the question is: how are we are supposed to retire? We need enough to potentially last 30 to 35 years (depending on our life expectancy). Ugh! 

While these issues certainly impact both men and women, the impact on women can be tenfold. Let’s take a look at some of the major issues women face when it comes to retirement planning. 

1. Women Have Fewer Years of Earned Income Than Men 

Women tend to be the caregivers for children and other family members. This ultimately means that women have longer employment gaps as they take time off work to care for their family. The result: less earned income, retirement savings, and Social Security earnings. It can also halt career trajectory.   

Action Steps 

• Attempt to save at a higher rate during the years you ARE working. It allows you to keep pace with your male counterparts.

• If you are married you may want to save in a ROTH IRA or IRA (with spousal contributions) each year, even if you are not in the workforce. 

• If you are serving as the caregiver for a family member, consider having a Paid Caregiver Contract drawn up to receive legitimate and reportable payment for your services. This could potentially help you and help your family member work towards receiving government benefits in the future, if and when needed. 

2. Women Earn Less Than Men 

For every $1 a man makes, a woman in a similar position earns 84¢ according to the Bureau of Labor Statistics. As a result, women see less in retirement savings and Social Security benefits based on earning less.  

Action Steps 

• Again, save more during the years you are working. Attempt to maximize contributions to employer plans. Also, make annual contributions to ROTH IRA/IRAs and after-tax investment accounts. 

• Invest in an appropriate allocation for your long term investment portfolio, keeping in mind your potential life expectancy. 

• Be an advocate for yourself and your women cohorts when it comes to requesting equal pay for equal work. 

3. Women Are Less Aggressive Investors Than Men 

In general, women tend to be more conservative investors than men. Analyses of 401(k) and IRA accounts of men and women of every age range show distinctly more conservative allocations for women. Especially for women, who may have longer life expectancies, it’s imperative to incorporate appropriate asset allocations with the ability for assets to outpace inflation and grow over the long term. 

Action Steps 

• Work with an advisor to determine the most appropriate long term asset allocation for your overall portfolio, keeping in mind your potential longevity, potential retirement income needs, and risk tolerance. 

• Become knowledgeable and educated on investment and financial planning topics so that you can be in control of your future financial decisions, with the help of a good financial advisor. 

4. Women Tend to Live Longer Than Men 

Women have fewer years to save and more years to save for. The average life expectancy is 82.1 for women and 77.8 for men according to the Centers for Disease Control and Prevention. Since women live longer, they must factor in the health care costs that come along with those years.   

Action Steps 

• Plan to save as much as possible. 

• Invest appropriately for a long life expectancy. 

• Work with an advisor to make smart financial decisions related to potential income sources (coordinate spousal benefits, Social Security, pensions, etc.) 

• Make sure you have a strong and updated estate plan. 

• Take care of your health to lessen the cost of future healthcare. 

• Plan early for Long Term Care (look into Long Term Care insurance, if it makes sense for you and if health allows). 

5. Women Who Are Divorced Often Face Specific Challenges and Are Less Likely to Marry After “Gray Divorce” (Divorce After 50) 

From a financial perspective, divorce tends to negatively impact women far more than it does men. The average woman’s standard of living drops 27% after divorce while the man’s increases 10% according to the American Sociological Review. That’s due to various reasons such as earnings inequalities, care of children, uneven division of assets, etc. 

The rate of divorce for the 50+ population has nearly doubled since the 1990s according to the Pew Research Center. The study also indicates that a large percentage of women who experienced a gray divorce do not remarry; these women remain in a lower income lifestyle and less likely to have support from a partner as they age. 

Action Steps 

• Work with a sound advisor during the divorce process, one who specializes in the financial side of divorce such as a Certified Divorce Financial Analyst (CDFA) (Note: attorneys often do not understand the financial implications of the divorce settlement). 

6. Women Are More Likely to Be Subject to Elder Abuse 

Women live longer and are often unmarried or alone. They may not be as sophisticated with financial issues. They may be lonely and vulnerable. New reports highlight financial exploitation as the fastest-growing form of elder abuse, disproportionately affecting older women, according to the Transamerica Institute.  

Action Items 

• If you are an older adult, put safeguards in place to protect yourself from Financial Fraud and abuse. For example: check your credit report annually and utilize credit monitoring services like EverSafe.  

• Have your estate planning documents updated, particularly your Durable Powers of Attorney documents, so that those that you trust are in charge of your affairs if you become unable to handle them yourself. 

• If you are in a position of assisting an older adult friend or relative, check in on them often. Watch for changes in their situations or behavior and do background checks on anyone providing services. 

While it is unlikely that the retirement challenges facing women will disappear anytime soon, taking action can certainly help to minimize the impact they can have on women’s overall retirement planning goals. I have no doubt that with a little extra planning, and a little help from a quality financial advisor/professional partner, women will be able to successfully meet their retirement goals.   

If you or someone you know are in need of professional guidance, please give us a call. We are always happy to help. 

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Raymond James is not affiliated with EverSafe.

The cost and availability of Long Term Care insurance depend on factors such as age, health, and the type and amount of insurance purchased. These policies have exclusions and/or limitations. As with most financial decisions, there are expenses associated with the purchase of Long Term Care insurance. Guarantees are based on the claims paying ability of the insurance company.

7 Ways the Planning Doesn't Stop When You Retire

Contributed by: Sandra Adams, CFP®

Most materials related to retirement planning are focused on “preparing for retirement” to help clients set goals and retire successfully. Does that mean when goals are met, the planning is done? In my work, there is often a feeling that once clients cross the retirement “finish line” it should be smooth sailing from a planning standpoint. Unfortunately, nothing could be further from the truth. For many clients, post-retirement is likely when they’ll need the assistance of a planner the most!

Here are 7 planning post-retirement issues that might require the ongoing assistance of a financial advisor:

1. Retirement Income Planning - An advisor can help you put together a year-by-year plan including income, resources, pensions, deferred compensation, Social Security and investments. The goal is to structure a tax-efficient strategy that is most beneficial to you.

2. Investments - Once you are retired, a couple of things happen to make it even more important to keep an active eye on your investments: (1) You will probably begin withdrawing from investments and will likely need to manage the ongoing liquidity of at least a portion of your investment accounts and (2) You have an ongoing shorter time horizon and less tolerance for risk.

3. Social Security - It is likely that in pre-retirement planning you may have talked in general about what you might do with your Social Security and which strategy you might implement when you reach full retirement age (which is 67). However, once you reach retirement, the rubber hits the road, and you need to navigate all of the available options and determine the best strategy for your situation – not necessarily something you want to do on your own without guidance.

4. Health Insurance and Medicare - It’s a challenge for clients retiring before age 65 who have employers that don’t offer retiree healthcare. There’s often a significant expense surrounding retirement healthcare pre-Medicare.

For those under their employer healthcare, switching to Medicare is no small task – there are complications involved in “getting it right” by ensuring that clients are fully covered from an insurance standpoint once they get to retirement.

5. Life Insurance and Long-Term Care Insurance - Life and long-term care insurances are items we hope to have in place pre-retirement. Especially since the cost and the ability to become insured becomes incredibly difficult, the older one gets. However, maintaining these policies, understanding them, and having assistance once it comes to time to draw on the benefits is quite another story.

6. Estate and Multigenerational Planning - It makes sense for clients to manage their estate planning even after retirement and until the end of their lives. It’s the best way to ensure that their wealth is passed on to the next generation in the most efficient way possible. This is partly why we manage retirement income so close (account titling, beneficiaries, and estate documents). We also encourage families to document assets and have family conversations about their values and intentions for how they wish their wealth to be passed on. Many planners can help to structure and facilitate these kinds of conversations.

7. Planning for Aging - For many clients just entering retirement, one of their greatest challenges is how to help their now elderly parents manage the aging process. Like how to navigate the health care system? How to get the best care? How to determine the best place to live as they age? How best to pay for their care, especially if parents haven’t saved well enough for their retirement? How to avoid digging into your own retirement pockets to pay for your parents’ care? How to find the best resources in the community? And what questions to ask (since this is likely foreign territory for most)?

Since humans are living longer lives, there will likely be an increased need and/or desire to plan. In an emergency, it could be difficult to make a decision uninformed. A planner can help you create a contingency plan for potential future health changes.

While it seems like the majority of materials, time, and energy of the financial planning world focuses on planning to reach retirement, there is so much still to do post-retirement. Perhaps as much OR MORE as there is pre-retirement. Having the help of a planner in post-retirement is likely something you might not realize you needed, but something you’ll certainly be glad you had.

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Sandra D. Adams and not necessarily those of Raymond James.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Center for Financial Planning, Inc. Center for Financial Planning, Inc.® is not a registered broker/dealer and is independent of Raymond James Financial Services.

Center Clients Donate $1.7 Million in Tax-Savvy Qualified Charitable Distribution Strategy in 2025

Contributed by: Lauren Adams, CFA®, CFP®

We are proud to announce that The Center assisted clients in donating $1,670,000 to charities using the Qualified Charitable Distribution (QCD) strategy in 2025!

The QCD strategy allows clients with assets in an IRA account and who are over age 70.5 to donate funds directly from their retirement account to a charity. Giving directly from an IRA to charity results in those dollar amounts not being included in taxable income for that year. That usually results in a lower tax bill for our clients and can also have positive downstream effects like lowering the amount they may pay for Medicare premiums and the portion of Social Security that is taxable to them, depending on their situation and income level. For those 73 or older, QCDs also count towards the distributions they need to take each year for their Required Minimum Distribution.

Now there are some caveats for QCDs – you need to be at least 70.5. Also, the charity has to be a 501(c)(3). And there are limits on how much you can give each year through this method – but that number is actually quite high at $111,000 per person per year right now.

The Center’s mission is to improve lives through financial planning done right, and we are so proud to be able to help clients make such a positive impact on the world (bonus points for it being in a tax-savvy manner!).

Did you know that QCDs are only one of many charitable giving strategies that our team helps clients deploy? Check out this video to learn more about ways our clients make their charitable dollars stretch further for the causes they care about while also potentially lowering their tax burden.

As always, we recommend you work with your tax preparer to understand how these strategies affect your individual situation. If you want to explore these strategies and more, contact your Center financial planner today!

Lauren Adams, CFA®, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® She works with clients and their families to achieve their financial planning goals.

Any opinions are those of Lauren Adams and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

Q4 2025 Investment Commentary

Contributed by: Angela Palacios, CFP®, AIF®

Contributed by: Nicholas Boguth, CFA®, CFP®

As we close out 2025, global markets have successfully navigated a year of disruption. Tariffs, AI, and a weaker US dollar have influenced investment outcomes. Inflation continued to trend closer to the Federal Reserve target, while bonds quietly rallied as interest rates were cut. Equity markets reflected this pivot, with leadership broadening beyond mega-cap technology as cyclical sectors regained footing amid improving global demand.

Investor sentiment seemed to fluctuate between optimism and caution over structural headwinds—from persistent fiscal deficits to geopolitical uncertainties. Geopolitics have been in the forefront of headlines to start out the new year with the capture of Nicolas Maduro and his wife. Check out this whitepaper for more information on what that could mean for oil markets. While cryptocurrencies fell out of favor, precious metals have regained the spotlight as governments view these as critical resources. As we look ahead, we are cautiously optimistic for a market environment that could prize discipline and adaptability. The S&P 500 ended the year up almost 18% even after it was down almost 20% back in April, while international markets represented by the MSCI ACWI Ex-US rallied even more up over 32%, and lastly bonds were up over 7%. For an idea of where that left diversified portfolios, Morningstar’s “Moderate Allocation” category had an average return of 12.5%.

Interest Rates, Inflation, and Unemployment

The Federal Reserve’s (the Fed) policy stance in 2025 marked a shift back to a more accommodative approach. After holding rates steady through the summer to ensure inflation was firmly trending toward its 2% target as tariffs were introduced, the Fed initiated a series of measured cuts late in the year as economic data allowed. These reductions, totaling 75 basis points, were framed by Fed chair, Jerome Powell, as a normalization rather than an emergency response, aiming to support moderating growth without reigniting inflation pressures. The Fed emphasized its data-dependent posture, leaving room for flexibility should labor markets or inflation dynamics deviate from expectations.

So what “data” is the Fed watching? Inflation and unemployment are the two main factors they focus on.  Core Consumer Price Index (CPI) is the Fed’s preferred gauge of inflation. As of late December, inflation was sitting around 2.6%. The Fed would like to see it continue to trend down toward 2%, but they seem content with numbers coming in below 3%. On the other hand, unemployment is currently sitting at 4.6% in December, and this number has trended up from near 4% earlier this year. When the Fed cuts interest rates, it risks spurring inflation, but it also helps keep unemployment low or lower. While they don’t seem too concerned about unemployment levels, the two levels trending in the direction they have this year seem to be giving the Fed reason to cut.

Despite rate cuts, some outstanding opportunities have flown under the radar of many. Municipal bonds! For high-tax bracket investors, municipal bonds that pay high-quality income allowed them to lock in very attractive taxable-equivalent yields throughout 2025. Even though short term interest rates were pushed lower by cuts from the Federal Reserve, longer-dated municipal bonds actually saw interest rates increase due to higher than normal issuance, tax uncertainty under a new President, and investor outflows! This area could be poised for a nice rebound.

Importance of Small Businesses

Small businesses are the backbone of our economy here in the U.S. The unemployment situation is largely influenced by whether small businesses (which make up 44% of our Gross Domestic Product (GDP) here in the U.S.) are hiring or pulling back. Small business bankruptcies are one way to monitor their health. In 2025, we saw small business bankruptcies up over 8% from the prior year and rising faster than those of larger businesses.  Small-company stocks, as represented by the Russell 2000, are worth watching, as they tend to be the “canary in the coal mine” if a recession is around the corner. While small businesses that aren’t publicly traded might be experiencing difficulty, the Russell 2000 has rallied strongly this year.

A.I. and Tech Outperformance

We can’t have a commentary without including one of the hottest topics of the year – Artificial Intelligence! Companies are making eye-popping investments into developing technology, building infrastructure, and figuring out how to implement this fast-growing technology into their businesses. Only time will tell if those investments turn out to be profitable or not, but the market is clearly excited about the prospects as it has rewarded most of those A.I. related companies with higher stock prices. The tech sector slightly lagged in Q4, but it led the way as the top-performing sector in 2025.

International Outperformance and Tariffs

Speaking of outperformance – were you invested in international equities this year? It has been a rough past decade for international stocks compared to their U.S. large counterparts, but the script flipped in 2025. International stocks (MSCI ACWI Ex-US) beat U.S. stocks (S&P 500) by ~15% this year, finishing with an impressive return of +32% for 2025. Could this be a turning point in market leadership going forward? No one knows for sure, but history has shown these two asset classes taking turns outperforming each other, and international stocks do have a major tailwind given their discounted starting valuations compared to the extremely elevated valuations of the U.S.

International performance might be the most surprising outcome of the year, given the political backdrop to start the year. Trump started his presidency with a focus on American leadership, which might suggest stock outperformance, and then introduced tariffs to improve America’s trading position and penalize unfair foreign trade practices… which, at face value, also seems to suggest U.S. stock outperformance! But here we are at year-end with international outperformance that nobody saw coming. To us, this just further reinforces our belief in diversification and a disciplined process for our portfolios. Chasing headlines or short-term gains may have led investors to miss the strong run in international stocks this year.

Bitcoin Down and Metals Way Up

After peaking in October, Bitcoin fell over 30% in just over one month and ended the year slightly negative. Gold, on the other hand, had a historic year, rising by over 60%. That is gold’s strongest return since the early 70’s! These alternative asset classes are prone to volatility. What goes up quickly can also come down quickly. Be wary of narratives that try to make sense of these moves or extrapolate them going forward. Is gold’s run an indication of the end of U.S. dollar dominance? Is Bitcoin’s dip an indication of its demise? Or is this normal volatility from historically volatile asset classes that can move violently in both directions? Every investor has to decide for themselves whether alternative asset classes with this kind of volatility belong in their portfolios.

What Major Analysts Think for 2026…and Does It Matter?

There is an annual practice from big banks and analyst firms to publish their S&P 500 year-end price targets. They are historically not very accurate. We included this in our Q4 commentary last year as well! With that being said, analysts last year were generally bullish, and the stock market was up about 17%…well done to the analysts who nailed it! Or perhaps a betting man would perform best by looking back 150 years and predicting the most common return for the stock market…

2026 analyst predictions are looking mostly bullish again. We’ll review them again next year and see how they did! They may not be the most useful for predicting the future of the stock market, but they are useful for better understanding expectations and what is being priced into the market. Currently, it seems the market is pricing in serious optimism, with bullish analysts and near-record-high valuations.

We will continue to stick to our process, diversify, maintain appropriate cash levels, and, most of all, lean on sound financial planning to ensure we are prepared for whatever the market throws at us next. As always, we are here to help answer any questions you may have regarding your individual financial situation. We hope you had a great year – now onto what we hope is a great 2026!

Angela Palacios, CFP®, AIF®, is a partner and Director of Investments at Center for Financial Planning, Inc.® She chairs The Center Investment Committee and pens a quarterly Investment Commentary.

Nicholas Boguth, CFA®, CFP® is a Senior Portfolio Manager and Associate Financial Planner at Center for Financial Planning, Inc.® He performs investment research and assists with the management of client portfolios.

Any opinions are those of Angela Palacios, CFP®, AIF® and Nick Boguth, CFA®, CFP® and not necessarily those of Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represent approximately 8% of the total market capitalization of the Russell 3000 Index. The MSCI EAFE (Europe, Australasia, and Far East) is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the United States & Canada. The EAFE consists of the country indices of 22 developed nations. The Bloomberg Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investors’ results will vary. Investing in oil involves special risks, including the potential adverse effects of state and federal regulation and may not be suitable for all investors. Past performance does not guarantee future results. Diversification and asset allocation do not ensure a profit or protect against a loss. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Past performance is not a guarantee or a predictor of future results. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

Bitcoin issuers are not registered with the SEC, and the bitcoin marketplace is currently unregulated. Bitcoin and other cryptocurrencies are a very speculative investment and involves a high degree of risk.

Q3 2025: A Quarter of Records & Resilience in the Markets

Contributed by: Mallory Hunt

The third quarter of 2025 will be remembered as a historic chapter in the ongoing bull market, delivering a standout performance and offering a welcome boost to investor confidence and portfolio growth. Despite ongoing economic headwinds and global uncertainty, investors witnessed a powerful rally. Markets surged to record highs, driven by strong corporate earnings, a strategic rate cut from the Federal Reserve, and the continued dominance of AI-powered growth stocks. This wasn’t just a strong quarter; it was pivotal, signaling a potential turning point in the post-pandemic economic cycle and offering fresh momentum heading into the final stretch of the year. Let’s take a look at some of those record-breaking numbers:

• The S&P 500 closed above $6600 for the first time, logging 23 record highs, matching the most in any quarter since Q1 1998. Final numbers had the index up 7.79% for the quarter and over 13.72% year-to-date.

• Nasdaq Composite soared 11.24%, driven by continued momentum in AI-related stocks.

• Dow Jones Industrial Average rose 5.22%, marking its 8th record high of the year.

• Russell 2000 small-cap index jumped 12.02%, outperforming large caps and reaching its first record high since 2021.

This remarkable market performance wasn’t just pure luck; several key drivers came together to propel markets to new heights and can be credited as the fuel to this rally:

• AI Momentum: The “Magnificent 7” tech stocks (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia & Tesla) continued to dominate, with artificial intelligence innovation driving investor enthusiasm and capital inflows

• Federal Reserve Rate Cut: The Fed delivered the first rate cut of the year in September, lowering the federal funds rate by 25 basis points and signaling a shift toward a more accommodative policy. This helped ease market concerns and boost investor sentiment.

• Strong Corporate Earnings: Over 80% of S&P 500 companies exceeded earnings expectations in the second quarter of 2025, which drove investor sentiment in the third quarter and reinforced the strength of U.S. corporations.

• Global Market Participation: International markets also rallied, with emerging markets outperforming developed ones. Easing trade tensions and supportive policy measures contributed to the global upswing.

As far as sector standouts, leading the quarter’s rally was technology, powered by AI-driven momentum, strong earnings, and expanding valuations. Healthcare demonstrated resilience amid evolving policy landscapes and ongoing innovation. Small-cap stocks outperformed their large-cap counterparts, signaling broader market strength. Growth stocks continued to outpace value stocks, particularly within consumer discretionary and communication services. Meanwhile, safe-haven assets like gold and silver also surged, with gold climbing over 15% and silver approaching its 1980 highs, as investors sought protection against inflation.

While the quarter was overwhelmingly positive, several cautionary factors remain on the radar. Inflation remains above target. Equity valuations have reached elevated levels, prompting concerns that limited earnings growth could cap future gains. Geopolitical and trade tensions persist, including ongoing tariff disputes and global instability, which pose risks to supply chains and investor confidence. Additionally, the current government shutdown will likely delay critical economic data releases, potentially complicating the Federal Reserve’s policy decisions and adding uncertainty to the market outlook.

As we transition into the fourth quarter—a period that historically favors market strength—investors have reason to remain optimistic, while staying mindful of elevated valuation levels and macroeconomic signals. While past performance is never indicative of future results, the momentum from Q3 sets a compelling stage for what could be a potentially dynamic finish to the year. Staying invested and diversified remains key, as disciplined strategies continue to benefit from long-term market trends.

Mallory Hunt is a Portfolio Administrator at Center for Financial Planning, Inc.® She holds her Series 7, 63 and 65 Securities Licenses along with her Life, Accident & Health and Variable Annuities licenses.

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Mallory Hunt and not necessarily those of Raymond James. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Every investor's situation is unique, and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

Q3 2025 Investment Commentary

Contributed by: Center Investment Department

The third quarter of 2025 was one for the record books. The S&P 500 hit new all-time highs 23 times during the quarter. That is the most new highs in a single quarter since 1998! Bonds and small company stocks did not want to be left behind. The Russell 2000 set its own first record high since 2021, and the Bloomberg Aggregate Bond index moved higher for the 3rd straight quarter. Developed international and emerging markets also continued their strong start to the year. For more details, check out our blog. This means that this year has been great for diversified portfolios, which have taken less risk than the S&P 500 but logged nearly as high returns for a 60% Stock/40% Bond portfolio (40% Bloomberg Aggregate Bond index, 40% S&P 500, and 20% MSCI EAFE International index).

Muted Inflation and Interest Rate Cut

While inflation is tempered for now (even though it lingers above the 2% Fed target), we will likely see it rise in the coming months. Tariffs will cause upward pressure, but low energy prices, declines in shelter inflation, and global economic sluggishness should mitigate the rise.

The Federal Reserve (The Fed) began cutting interest rates again, citing a sluggish labor market.  The first cut of .25% occurred in September and is likely to be followed by 1 or 2 more .25% cuts this year. The Fed will continue to let data drive its decision-making here. The only issue with this is that some data points may be very delayed due to the government shutdown. Lower rates will mean lower money market interest rates, but should also lead to a welcome reduction in mortgage interest rates. 

Tariffs

Tariff revenue is starting to ramp up. Both August and September reports indicate that monthly revenue was over $31 billion each month. Our weighted average tariff revenue in the U.S. is sitting just over 15% compared to just 2.5% in February of this year. As an example, if a 20% average tariff rate were in place for the next 12 months, the U.S. Treasury could collect over $600 billion, which exceeds taxes received from corporations! It remains to be seen how companies will manage this, whether they absorb the hit to their bottom line or pass it along to consumers. Given enough time, companies will also find strategies to mitigate, such as onshoring production or shifting production to countries with lower tariff rates, to stay competitive.

While tariffs were ruled unlawful by lower courts, this case is now in the Supreme Court’s hands, and it could take several months before a final ruling. So they are here to stay for the time being.

Government Shutdown

As of October 1st, the U.S. government has officially entered a shutdown—its first in nearly seven years since the record-breaking 35-day standoff in 2018. The impasse stems from Congress’s failure to pass a budget, driven by partisan disagreements over healthcare funding and proposed federal spending cuts. This has led to disruptions across key agencies, such as the Bureau of Labor Statistics, which has delayed vital economic data and raised concerns about the Federal Reserve’s ability to make informed monetary policy decisions. While this shutdown carries unique weight due to the administration’s push for permanent layoffs and structural changes, investors are reminded that volatility often presents opportunity. Shutdowns are typically brief, averaging just nine days and usually create openings for disciplined investors to reassess and rebalance.

As illustrated in the chart below, the S&P 500 has consistently trended upward in the months following past shutdowns. Despite initial turbulence, markets have shown remarkable resilience, frequently rebounding once political uncertainty fades. 12-month gains following the 20 shutdowns over the past 50 years have averaged 13%, with positive performance 85% of the time! Shutdowns may feel unsettling in the moment, but history offers a reassuring perspective: portfolios anchored in strong fundamentals tend to weather political disruptions better than reactive strategies. Staying diversified and focused on long-term goals remains the most effective approach. The chart serves as a powerful visual reminder that staying the course has historically paid off, even when headlines suggest otherwise.

Investing at All-Time Highs

We are navigating this current stock market with two competing narratives. One screams, “sell!” as valuations continue to rise to historic levels despite a weakening labor market, increased tariffs, and uncertain global trade. The other screams, “buy!” as consumers remain strong, the Fed begins cutting rates, companies continue to grow earnings, and the excitement around productivity gains from A.I. continues to accelerate. Whatever your opinion on the stock market, the fact is that the S&P 500 continued to make new all-time highs this quarter – which is NOT an indicator that stocks need to fall. On the contrary, all-time highs tend to be followed by…more all-time highs. With that being said, it is understandable to be concerned or have a cautious outlook on equity markets going forward. When times feel extra uncertain, we lean on our process, historical precedent, diversification, emergency cash reserves, and strong financial planning to provide comfort and give us the conviction we need to stick to the plan.

Gold’s Strong Performance

The remarkable run-up in gold prices this year also speaks to the themes of uncertainty and opportunity in today’s investment landscape. By the end of this quarter, gold had risen above $3,800 per ounce, marking a staggering 47% gain year-to-date and setting repeated record highs amid rate cuts, rising deficits, geopolitical tensions, and government shutdowns. Will it reach a historic new level and surpass $4,000 this year? Maybe…that is only another ~5% away. Gold is a volatile investment that typically moves in bursts, and we are currently witnessing one impressive surge. Like any investment, it comes with serious risk, though. Check out the chart below to see some of gold’s historic crashes.

It has had multiple periods where it was cut in half over YEARS. It can have beneficial attributes in an investment portfolio due to its uncorrelated nature, but no investment is perfect, so consider the risks before allocating or chasing performance. Also, keep in mind the long-term performance of gold vs. stocks and bonds.

As we enter the final stretch of 2025, your financial plan is prepared for what the markets may throw our way. Six months ago, on April 2nd, Liberation Day, the tariff plan was rolled out. This caused a sharp correction in markets, but almost as sharp a recovery. If you blinked, you probably missed it. It is an important reminder not to make knee-jerk reactions with your portfolio during these times of volatility, as you could quickly be left on the sidelines waiting for your re-entry point, especially when markets soar to new highs, as they have this year. If you have any questions, we are always here for you. Please don’t hesitate to reach out to us!

Any opinions are those of Angela Palacios, CFP®, AIF®, Nick Boguth, CFA®, CFP®, and Mallory Hunt and not necessarily those of Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represent approximately 8% of the total market capitalization of the Russell 3000 Index. The MSCI EAFE (Europe, Australasia, and Far East) is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the United States & Canada. The EAFE consists of the country indices of 22 developed nations. The Bloomberg Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Investing in oil involves special risks, including the potential adverse effects of state and federal regulation and may not be suitable for all investors. Past performance does not guarantee future results. Diversification and asset allocation do not ensure a profit or protect against a loss. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Past performance is not a guarantee or a predictor of future results. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

Investing in gold carries special risks, including wide price fluctuations, a limited market, concentrated sources in potentially unstable countries, and an unregulated market.

Q2 Investment Commentary - Diversification Delivers Results

Contributed by: Angela Palacios, CFP®, AIF®

Key Highlights This Quarter:

• Diversification Outperforms
  A balanced portfolio returned +6.69%, outpacing the S&P 500’s +6.2%, while also reducing risk amid market swings.

• Market Volatility Persists
  The S&P 500 hit new highs, dropped into correction, and rebounded—all within the quarter—highlighting the value of a balanced approach.

• Tariff Tensions Resurface
  Trade negotiations remain uncertain as the U.S. approaches key deadlines. Tariff revenue is rising, largely funded by U.S. consumers and businesses.

• “Sell America” Fears Overblown
  Despite April’s rare simultaneous drop in stocks, bonds, and the dollar, foreign demand for U.S. assets remains strong. Bond yields fell, and U.S. equities hit new highs by quarter-end.

• Credit Rating Downgrade
  Moody’s downgraded the U.S. from AAA to AA1—still strong, but a signal worth monitoring.

• Consumer Resilience Holds
  TSA screenings, hotel occupancy, and restaurant reservations remain robust, signaling continued consumer strength (Source: Raymond James Up and Adam).

• Geopolitical Risks Rise
  Escalation in the Middle East caused short-term volatility and a modest rise in gold and oil prices. Historically, such events have limited long-term market impact.

• GDP Impacted by Imports
  A surge in imports ahead of tariffs dragged Q1 GDP, but underlying consumer demand and inventory growth remain solid.

The first six months of 2025 have been anything but calm—changing government leadership, trade negotiations, global conflicts, and volatile markets have kept headlines spinning. Even the Federal Reserve, after pausing rate hikes, cited 'uncertainty' caused by tariffs. We have watched the S&P 500 hit new all-time highs, fall into correction territory, and then back to new all-time highs in a very short period. A diversified portfolio has provided some welcome risk reduction this year while also outpacing the returns of the S&P 500.

Tariffs

It is likely that we will continue to see volatility as the trade war escalates again, given the approaching expiration of the 90-day negotiation deadlines with various countries. There were numerous headlines surrounding the on-again, off-again tariff situation throughout the quarter. In the second half of the quarter, the legality of certain tariffs has been called into question, but there has been little traction on this issue, and it is a lengthy process to progress through the court system. The Big, Beautiful Bill is counting on about $2.5 Trillion in tariff revenue to offset costs. It is too soon to say if this will materialize, but for now, the worst-case Tariff scenarios seem to be off the table, and with that, consumer sentiment has improved. The very early data below show that in April and May, the government is earning more in tariff revenue than it did the year before. Where is that coming from? Mostly American consumers and businesses.

Best offers from trading partners were due on June 4th. As information becomes available regarding the parameters of certain deals, it is essential to remember that it will be unrealistic to negotiate a deal with every trading partner by July 8th (the 90-day deadline). However, don't get caught up in noise from small trading partners. We should focus most closely on our top 10 trading partners, as they account for 80% of our trade volume. The EU, Mexico, China, and Canada are our top trading partners, collectively accounting for 60% of our trade.

3 possible outcomes after July 9th (most likely a mixture of all 3 as the month continues): 

1. It could be a nonevent for certain countries with additional deadline extensions ;

2. It might be a time of celebration of long-promised trade deals;

3. Or it could be a day for other countries when the hammer comes down, and tariffs are simply dictated again.

Sell America!?

Among the April drawdown post-liberation day, we saw this "sell America" theme emerge. The worry was that investors had collectively lost faith in all things America, which caused a rare occurrence where stocks, bonds, and the U.S. dollar all fell at the same time. While rare, this does not necessarily need to be a red flag. April was a bit of an anomaly compared to a "normal" market environment because President Trump shook up all global trade.

To add to the headlines, Moody's decided in May to move the U.S.A. down one notch on their credit rating system – from AAA to AA1. Still great, but not perfect. Also, it's a worrisome headline.

We are not going to ignore the headlines; they COULD be the start of larger themes, but maybe more importantly, we will track the data to see where money is ACTUALLY going. Despite the headlines, Bloomberg reported that foreign banks were still holding more U.S. treasuries than ever. Despite the "sell America" headline, it seems that everyone is still "buying America." Another confirmation of this fact is that bond yields are lower than they were when we started the year. If investors were selling U.S. bonds in mass, you would likely see higher yields. And this is without even mentioning U.S. stocks (while underperforming internationally) were hitting all-time highs at the end of June.

Here is how our new rating stacks up against the rest of the world’s largest economies.

GDP

The decline was driven by a significant surge in imports, which is a subtraction in the calculation of GDP. Imports increased at an annualized rate of 41.3% in the first quarter as companies packed in as many orders as they could ahead of anticipated tariffs from the Trump administration. The surge in imports was good for a -5% contribution to the GDP calculation in the first quarter. Final sales of goods to domestic purchasers, another sign of demand in the economy, grew at a 3% annualized rate in the first quarter, above the 2.9% seen in the fourth quarter of 2024. We saw a huge build in inventories. However, when you examine underlying demand and consumer spending growth, it was still relatively solid.

There are several interesting real-time economic indicators that help determine the health of the consumer, who accounts for 70% of our economy. TSA screenings, Hotel occupancy, and restaurant reservations are all still looking very strong throughout the quarter. People are still going out to travel and eat.

Geopolitical Events

The Middle East conflict between Iran and Israel escalated significantly in June when Israel targeted bombing Iran's nuclear capabilities and the U.S., followed by also striking their nuclear facilities later in June. As a result, we saw some initial volatility, and gold prices climbed modestly again. However, history tells us that events like these, although extremely concerning from a humanitarian perspective, often cause initial stock market volatility but have a minimal impact over the long term. Most of the time, the S&P 500 notches positive returns, with an average annual return of about 8.5% when fast-forwarded 12 months.

Oil prices also spike as Iran is responsible for supplying a portion of the world's oil. However, it is interesting to note that the U.S. has become far less dependent on importing oil. In fact, we are net EXPORTERS of oil. See the chart below:

As you enjoy these final beautiful summer months, don't hesitate to reach out to us with any questions you may have. We appreciate the trust you place with us; thank you!

Angela Palacios, CFP®, AIF®, is a partner and Director of Investments at Center for Financial Planning, Inc.® She chairs The Center Investment Committee and pens a quarterly Investment Commentary.

Any opinions are those of the Angela Palacios, CFP®, AIF® and Nick Boguth, CFA®, CFP® and not necessarily those of Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represent approximately 8% of the total market capitalization of the Russell 3000 Index. The MSCI EAFE (Europe, Australasia, and Far East) is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the United States & Canada. The EAFE consists of the country indices of 22 developed nations. The Bloomberg Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Investing in oil involves special risks, including the potential adverse effects of state and federal regulation and may not be suitable for all investors. Past performance does not guarantee future results. Diversification and asset allocation do not ensure a profit or protect against a loss. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Past performance is not a guarantee or a predictor of future results. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.