The final week of the year is not the time to check out. While the markets trade on thin holiday volume, smart money is actively executing final tax-loss harvesting maneuvers and repositioning portfolios for the realities of 2026.
This year has been defined by the Federal Reserve's aggressive pivot to a "higher for longer" stance. As we close the books on 2025, the priority is to lock in your gains, offset your liabilities, and ensure your financial infrastructure is optimized for a plateaued rate environment.
The Data
- S&P 500 YTD: The broader market index is tracking toward a robust 19.5% annual gain.
- 10-Year Treasury: The benchmark yield ends the year hovering near 4.20%.
- Mortgage Originations: Total mortgage application volume remains down 14% year-over-year.
- Core PCE (Nov): The latest inflation read confirmed a cooling trend at 2.7%.
Investing
If you have underperforming assets in your taxable brokerage accounts, execute your tax-loss harvesting immediately. Selling losing positions to offset your capital gains is the most guaranteed return on investment you can make this week. Log into your Online Brokers and review your realized gains. If you utilize Robo-Advisors, ensure their automated tax-loss harvesting features are toggled on. Next, verify that your portfolio rebalancing targets align with a 2026 economy that features slower growth but higher baseline yields.
Home
For homeowners, the end of the year is the deadline for finalizing any deductible housing expenses. If you closed on a mortgage this year, ensure you have documented your points and origination fees for your tax preparer. Looking ahead to Q1, monitor Mortgage Rates closely; if you bought at the peak of 2024, prepare your documentation now so you can execute a rapid Refinance if rates dip meaningfully in January.
Insurance
Use this quiet week to review your policies. The replacement cost of your home has likely increased, and your coverage limits may no longer be adequate. Audit your Home and Auto policies. Furthermore, if you experienced major life events in 2025—marriage, the birth of a child, or a significant change in income—you must update your Life insurance beneficiaries and coverage amounts before the new year begins.
The Week Ahead
- Pending Home Sales: A forward-looking indicator of housing market health to close out the year.
- Initial Jobless Claims: The final weekly labor market read of 2025.
- Market Holiday: Equity and bond markets will be closed on Thursday for New Year's Day.
Disclaimer: The information provided in this article is for informational purposes only and does not constitute financial or tax advice. Consult a professional before making tax-related decisions.