January 2026

The Slice

A Monthly Market Update & Investment News Roundup

Cutting through the noise...so you don't have to.

Good afternoon,

Ah, the New Year. Time for new goals and a clean slate. 

Before we get into this month's newsletter, let me share a few of mine and, if I could, ask for your help.

2026 Goals:

1. Onboard 4 (four) new clients. A great client for us is a business owner who is planning for a business sale or transition and needs help getting organized.
2. Add 314 new Slice subscribers.
3. Hire a Director of Planning. 10+ years in the business, high-achieving, detail-oriented CFP^® Professional. Must love tax planning.

We can't work with everyone, but we do want everyone in our orbit to be good financial consumers. If you like the Slice, help us help others by forwarding it to someone who you believe could benefit.

Even better: If you make an introduction to a qualified potential client or an employee who meets the criteria above in the financial planning industry, we'll send you a pie!

Thank you for reading, and we appreciate your support.

Moving on…

I talk to a lot of folks about the market - and how they feel about it. While most are happy about recent returns, you can sense the anxiety that people have about how far we've come, and how quickly. 

I understand that perspective. In 2025, the S&P500 returned nearly 18% with dividends. That's the third double-digit return year in a row, and the sixth double-digit gain in the last seven years. That's a lot of good news in a short period of time.

But it's not unprecedented. From 1995-1999, the S&P 500 averaged a 28% return for five years in a row. Then, like now, we're well above the long run average of 8-10% returns.

Coincidentally, 8-10% upside is about the midpoint of what analysts are projecting for 2026:

Credit: CNBC.

The irony is that we rarely see 8-10% actual returns any given year. 

Ryan Detrick at Carson Wealth points out that we've only seen the market return 8-10% four times since 1950:

The so-what of this is that market return streams are lumpy. We get a streak of higher returns like we've seen since 2019, and then there are periods like the 2000's where the market averages a 0% return for the entire decade.

But you don't get to choose. If you want 8-10% returns, you have to be along for the ride, in good markets and bad. 

Here's what you need to know.

Markets

2025 Year-to-Date Asset Class Returns

Data thru 12/31/2025. Source: © Exhibit A, FactSet Research Systems Inc., Standard & Poor's  This slide is for informational and illustrative purposes only. The data provided is believed to be accurate, but there is no guarantee of its accuracy, completeness, or timeliness. This is not a recommendation or offer of any financial product. Past performance is not indicative of future results, and investors should consider their own objectives and risk tolerance. Indices, if presented, do not include fees, are unmanaged, and not available for direct investment. Definitions & Methodology: The returns shown represent year-to-date price performance of sector ETFs provided by iShares (EEM, EFA, TIP,AGG, DJP), SPDR (GLD, VNQ, MDY, SPSM, SPY, BIL), and Vanguard (VNQ). These ETFs track the following sectors: Commodities, International, Emerging Markets, U.S. Large Cap, REITs, U.S. Mid Cap, TIPS, U.S. Small Cap, Cash, and Bonds. Data is sorted by return from highest to lowest.

News & Notes

• Improving Capital Market Assumptions: Goldman Sachs' research team sees global stocks returning 7.7% over the next decade. U.S. stocks are expected to return 6.5% per annum. (GS)
   

• Interview with Palantir CEO Alex Karp [Video]:  At the NYTimes DealBook Summit, Palantir's outspoken CEO, Alex Karp, pulled no punches: "What is the biggest problem in this culture? I'll tell you...No one believes [our] institutions are credible. These business leaders make completely stupid decisions, and they get bailed out. A year later they're getting huge bonuses and what do the American people get? Nothing....We at Palantir absorb the full weight of our stupidity, and everyone else should too." (NYT)
  
  Also from the DealBook Summit:
  
  Mary Barra, CEO, General Motors (NYT)
  Scott Bessent, Secretary of the Treasury (NYT)
  Jimmy Donaldson, Founder, MrBeast (NYT)
  Gavin Newsom, Governor of California (NYT)

• Economy: US 3rd Quarter GDP grew at a 4.3% annualized pace - the highest in two years. Higher-income consumers and AI related investment are driving the growth. (Barron's)
   
• Fed: In December, the Fed lowered rates again to a target range of 3.5%-3.75%, and provided an update of its economic projections that would lower rates to 3% by the end of 2027, implying two more cuts over the next two years. This month, President Trump is expected to name his pick for Fed Chair. Strategas' Dan Clifton breaks down the choice between the two leading candidates, Kevin Hassett and Kevin Warsh. (CNBC)
   
• The Biggest Risk Factors for Heart Disease: Kidney disease is a warning sign for heart disease as high blood pressure damaging kidneys probably also affects the heart and brain. (Barron's)
   
• Travel & Spend:
  36 Hours: Park City, UT (NYT)
  36 Hours: San Luis Obispo (NYT)
  36 Hours: Toulouse (NYT)
  
  What It's Like to Retire in Portugal (WSJ)
  
  New Favorite Thing: Oral B Electric Toothbrush

(Pie)Chart of the Month

A Look at S&P 500 Profit Margins 

Source: 3Fourteen Research. 

It's true that stocks are expensive relative to historical norms, but for good reason: In 1996, profit margins were about 6%. Now, they're at 14% and rising as S&P 500 constituents, on average, have become less capital intensive. All things being equal, that's like owning an investment that doubles every 12 years versus every 5 years. So, yes, you have to pay more for higher growth.

Management Tip

Become a Better Conversationalist:

To become a great conversationalist in both work and non-work settings, use the TALK framework: Topic, Asking, Levity, and Kindness. Here’s how:

• Start by preparing topics. Think ahead about two or three things your conversation partner might enjoy discussing. Once you’re talking, don’t linger too long on any one subject—switch topics if you notice your counterpart’s energy dipping or interest fading.
   
• Ask more questions—especially follow-ups. No one likes to be talked at. Being inquisitive shows you’re listening and encourages deeper sharing. 
   
• Infuse levity to counter boredom and disengagement. This doesn’t mean you need to tell jokes; compliments, smiling, or switching to lighter topics can create connection and boost engagement, especially in professional settings.
   
• Finally, lead with kindness. Good conversations aren’t about being the smartest or most interesting person in the room—they’re about making others feel heard and valued. Show you’re listening by paraphrasing what others say or validating their perspective before responding.

Read the full article here. From HBR IdeaCast's conversation with Harvard Business School's Alison Wood Brooks. Brooks is the author of the book Talk: The Science of Conversation and the Art of Being Ourselves.

Firm News

Congratulations Molly!

Molly completed the CFA Institute Investment Foundations® Certificate program and was promoted to Operations Manager! 

The CFA Foundations program covers the investment industry’s structure, financial markets, professional roles, and client needs. In her new role as Operations Manager, Molly will be overseeing compliance and continuing to assist clients with client servicing and administration. Go Molly, and thank you for all of your hard work!

We've Moved!

Starting January 1st, our new office is located at Charter Square in downtown Raleigh. Our new address is:

PieCapital
555 Fayetteville St., #300
Raleigh, NC 27601

Thank you to our moving crew (pictured above) who was paid in Sun Chips and seltzer. 

HBD Christy!

We celebrated Christy with Bloody Marys, eggnog cheesecake (but it looked more like a pie) and rock climbing.

"Zero Stars. Do Not Recommend."

We went to Annapolis over the holiday and visited the fifth best military academy in the nation. No one had a good time.

Wishing you well-informed financial decisions in 2026!

Love The Slice? Forward it! Got forwarded The Slice? Subscribe here.