2025 – All that Glitters is Gold
There's a lady who's sure all that glitters is gold
And she's buying a stairway to Heaven
When she gets there, she knows if the stores are all closed
With a word, she can get what she came for
Ooh, and she's buying a stairway to Heaven
-Led Zeppelin– Stairway to Heaven 1971
The 'lady' in the famous Led Zeppelin ballad is a cautionary tale for the modern investor. Not only does she think she can do no wrong with her vast amount of gold, she can even buy her way into heaven. And if the store is closed, her wealth and power can still solve all of life’s problems. Things that seem important to her, likely aren’t. But as the song suggests, a reliance on what glitters can lead to a narrow-mindedness that ignores how life—and markets—actually work.
Realistically, can she really get what she came for over longer amounts of time with this type of mentality? Or should she focus her attention elsewhere and re-evaluate her current (mental) state of affairs this late in life?
Much the same for investors coming off of 2025, maybe now is a time to question whether to sell some of those investment profits in your portfolio and deploy the proceeds to less shiny objects that are more boring in nature but may provide income or better store of long-term value elsewhere.
Gold increased in 2025 like it hasn’t since the 1970s when Zeppelin was at their peak. We like our gold position, but I’m reminded that an asset that doubles or triples over a short period of time does not retain the store of value it had just 24 months ago --- even if it continues to rise, no matter how much it glitters.
The stars aligned quite a bit last year. As mentioned in the newsletter a year ago, we had a higher amount of international stock allocation vs the average moderate allocation benchmark for core portfolios, along with a sleeve of assets allocated to gold as a hedge. International stocks were up over 30% and gold was up 65% in ’25 which was significant for clients. The short story is that we’ll gladly accept the good fortune. See below.
Returns in 2025
| S&P | 17.8% |
| Russell 2000 / Small | 12.8% |
| MSCI EAFE – Int’l | 31.1% |
| MSCI World | 21.0% |
| US Agg Bond | 7.3% |
| FE Global I | 32.0% |
| Gold | 62.2% |
Source Morningstar
2025 Themes
- Gold and gold miners were the BIG winners
- International stocks outperformed the US stock market
- Fixed Income / Bonds had a solid year
- Growth stocks and Value stocks were both up similarly
- The dollar was down considerably
Source – First Eagle FEIM December 2025
The Piper is calling you to join him on the longer journey…. not the short run
If there's a bustle in your hedgerow, don't be alarmed now
It's just a spring clean for the May queen
Yes, there are two paths you can go by, but in the long run
There's still time to change the road you're on
Both Roberts (Frost and Plant) challenge us with a fork in the road. One path is the 'stairway' of temporary glitter; the other is the road less traveled — the path of discipline. Our philosophy remains grounded in the latter: preserving first, growing second.
In the short run, perhaps this path is more boring, but over time it may result in a more fruitful journey, especially for those that are spending their portfolios. Because of this, some clients have drifted outside of their risk profile due to the investment gains. While a good problem, it is one that may require some attention and pruning.
We want to be a hedge against future uncertainty, not ride the wave of optimism in this sector, or any sector for that matter. Although we are comfortable with the current price and our allocation to gold, note that we are NOT gold bugs. We are primarily owner of quality business at reasonable prices. More important is a clearly defined investment discipline built around seasoned managers and what is right for you.
Overall, the stock market and broader economy continue to remind investors that progress is rarely a straight line. Economic growth has remained resilient, supported by a strong labor market, consumer spending and AI. At the same time, inflation has cooled, for now. Interest rates remain higher than the ultra-low levels of the last decade and the environment remains unpredictable. History shows that markets tend to work through challenges over time. But key risks remain with elevated market valuations in the overall S&P, tight corporate credit spreads, widening deficits in the US. The key risk of global geopolitical uncertainty mentioned in numerous newsletters, is only getting worse. Frankly, this is difficult to diversify against. Furthermore, it is the US at the epicenter of the uncertainty, an unimaginable narrative 20 years ago.
We’ll continue to monitor conditions closely and make adjustments where appropriate—focused not on predicting the next headline, but on preserving and potentially growing your wealth over time.
2025 is also a reminder that over the short run there is both good and bad luck at times, and years of returns in one area can show up in just a blink of a few short months. This business can be more of an art form than a science. That is just how it works. (Shrug).
My (internet) friend Howard Marks reminds me via Nicholas Taleb:
The correctness of a decision can’t be judged solely from the outcome. Nevertheless, that’s how people assess it.
Source Oaktree 2019
Think crypto if that helps. My point is that things really worked out this year and you should temper expectations moving forward. We continue to search for value via our equity managers at First Eagle, FPA, TRP Capital Appreciation, Artisan. More importantly I like to believe that we are compounders of patience and prudence. The proof lies not in one year, but the journey over the course of time with ups and downs and twists and turns in the road less traveled.
I do not know where gold or the stock market will go from here. But I do know that investors sometimes forget that the market goes both ways, until it does. And when it goes south, many are quickly reminded of the risk involved.
And as we wind on down the road
Our shadows taller than our soul
There walks a lady we all know
Who shines white light and wants to show
How everything still turns to gold
And if you listen very hard
The tune will come to you at last
When all are one, and one is all
To be a rock and not to roll
…..and she's buying a stairway to Heaven
We have attempted to “listen very hard” to the quiet fundamentals rather than the loud, popular opinions of the day. Popularity is often a trap; 2025 illustrated why conviction still matters more than following the crowd.
In the song’s finale, the lady learns that "all that glitters" isn't the goal—it’s about being "a rock and not to roll." For us, being a "rock" means providing a steady foundation for your future, regardless of which way the market winds blow.
2026 marks a significant structural year for our firm, perhaps our most important since Dan Staub began this journey over 30 years ago. We are focused on our "inner workings" to ensure we remain the stewards you deserve.
These newsletters are a labor of love; they force me to think critically and reset my own temperament alongside yours.
We are undeniably blessed to be on this road with you.
The Standard & Poor’s 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries and widely held by individuals and institutional investors.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Investment involves risk including loss of principal. No strategy assures success or protects against loss.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Asset allocation does not ensure a profit or protect against loss.
Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.
The prices of small cap stocks are generally more volatile than large cap stocks.
The Russell 2000 Index is an unmanaged index generally representative of the 2,000 smallest companies in the Russell 3000 index, which represents approximately 10% of the total market capitalization of the Russell 3000 Index.
The fast price swings in commodities will result in significant volatility in an investor’s holdings. Commodities include increased risks, such as political, economic, and currency instability, and may not be suitable for all investors.