It is now 2026, which means a couple of things. First, Berkshire Money Management and other financial firms that help clients file tax returns are preparing for the Internal Revenue Service to begin accepting and processing 2025 federal income tax returns. So, start your digital file and collect items like last year’s tax returns, all your sources of income (like W-2s), and receipts for potential deductions such as charitable donations and mortgage interest.
Second, now that we have all designed our investment strategy for 2026 and settled into our New Year’s resolutions, it means reflecting on 2025. As the calendar turns, Investopedia comes up with its annual “Terms of the Year.” A couple are obvious (tariffs, AI stocks); one I had no idea was even a discussion (a pop star who was not Taylor Swift?!); and another (insider trading) made me feel nostalgic—not for last year but for 1987. “The Princess Bride.” Apple computers. Bob Seger’s “Shakedown.” Hulkamania. And let’s not forget the Yuppies and consumerism, which, in some ways, glorified the act.
Affordability. The term “inflation” was at the top of the list in 2024, and, consequently, “affordability” was on the top of the minds of Americans this year. In some respects, it makes sense—inflation is a measure of the rate of price increase. Theoretically, if inflation is high—or even just positive—things become less affordable. However, in practice, wages and income can also increase or decrease. In 2025, wage growth outpaced inflation by nearly one percentage point.
However, do not point that out if you are a politician—Democrat or Republican. If you point out to people that they have actually got it better than they used to, then they are going to burn you at the political stake.
Fortunately, as an economist, I can just point out the data and completely avoid telling people how they should feel. That being said, I am aligned with those feeling the vibecession (the sense of feeling economic angst despite positive economic data). Sure, like many Americans, our wages went up, but that is because we got smarter, became more productive, and did some pretty amazing things. We did that—you and me. However, it is not our fault that things cost more—and that leads to the unease about affordability.
Many of us are better off (on paper) than we were, but the economy still appears unjust. And it feels especially unfair for Americans living on a fixed income or earning wages near the minimum wage. Affordability is a real issue for people after four years of above-trend inflation.
Tariffs. President Trump declared April 2, 2025, “Liberation Day” and announced a broad package of import duties, including a baseline 10 percent tariff on nearly all countries. The tariffs had been promoted as “reciprocal,” but the global stock market crashed when the math showed they were anything but.
The stock market eventually rebounded, as it seemed the tariffs were not intended to dismantle the federal government’s hundred-year-old tax-collection system (i.e., trading income tax revenue for tariff revenue)—a shift that would have provoked an economic depression. Instead, President Trump appeared to use tariffs as leverage in trade negotiations. Because corporations were preparing for new tariffs, the economy contracted in the prior quarter (January to March 2025). Then, massive private-sector investment in artificial intelligence (AI) saved the economy.
AI Stocks. It got to a point in 2025 that the real bubble was in using the term “AI bubble.” The phrase found its way into headlines and onto the lips of pundits at a cartoonish rate. A survey by Investopedia showed that two-thirds of its readers believed AI-related stocks are in a bubble.
I have argued that there is no AI bubble. In fact, I invested directly in AI-related stocks, using funds such as the Invesco AI and Next Gen Software ETF (symbol: IGPT) and the Robo Global Artificial Intelligence ETF (symbol: THNQ).
Covered Call. Covered calls are an option strategy where you own a stock and simultaneously sell a call option against the stock. The investor using the strategy receives a premium for granting another party the right to buy the investor’s shares at a specified (strike) price by a certain date. The strategy is used to generate income on a stock you already own—especially if you expect the stock to remain flat or even decline. However, if the stock goes up, it caps your potential output.
Investors may have responded to AI bubble concerns by seeking income from the stocks they believed had reached their price limit for the time being.
Parlay. “Parlay” should probably have been replaced with a broader term, like “prediction market.” A parlay is a high-risk, high-reward bet that links together two or more individual bets but only pays out if each aspect of the bet wins. More important than the types of bets was the magnitude of the bets. Americans wagered about $160 billion online in 2025. The majority of those bettors were men, ages 18 to 34. A fear is that these younger gamblers will conflate betting with investing and treat stocks and other investments with the same lack of discipline. The good news is that if you own those stocks they invest in, they could fly high in price for no little or no reason—as gold did in 2025.
Gold. Nothing attracts a crowd like a crowd. And nothing gets investors into a buying frenzy more than higher prices—even when there is essentially zero rationality behind the move. In 2025, the price of gold shot up about 60 percent.
The impressive rise in gold last year followed a 15-year period of roughly five percent annual inflation-adjusted gains. Since gold bugs like to tout gold as the ultimate inflation hedge, it is fair to consider real (i.e., inflation-adjusted) returns. Comparatively, the S&P 500’s annualized inflation-adjusted returns were 11 percent over that period.
Why did gold spike in 2025? Maybe people thought the world would end and they could bribe the border guard with a small sack of the metal to let them through. However, not only did the world not end, but the U.S. economy grew by four percent in the second and third quarters of 2025.
Gold was not up in price because jewelry demand increased—gold jewelry demand declined by double digits.
And the demand for gold in industrial uses remained stable, so that was not a catalyst. Maybe, when prices go up, the investing mob buys first and asks questions later—which is great, until it ain’t.
Stablecoin. President Trump signed the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act). The act transformed stablecoins (a type of cryptocurrency designed to maintain a single unit value so that it can provide fast, inexpensive transactions) from a significant risk to something closer to traditional banking by requiring issuers to hold 1:1 reserves (often U.S. Treasury bills).
Key provisions included compliance, prohibition, and supervision of stable-value cryptocurrencies that could create a national payment license for financial companies. Perhaps the most significant component for crypto bros was that stablecoins were deemed not to be securities and rules for other digital assets were clarified.
Insider Trading. The year was 1987. Oliver Stone’s film “Wall Street” told the story of Gordon Gecko’s insider trading (the illegal act of buying or selling a company’s securities using material, nonpublic information) and how his mentee, Bud Fox, brought Gecko to justice.
The movie “Wall Street” was a work of fiction. In reality, Martha Stewart served five months in jail for insider trading. Other notable cases have resulted in jail sentences of up to 12 years.
The STOCK Act (Stop Trading on Congressional Knowledge) of 2012 does not appear to have the sort of teeth Congress promised its constituents. The STOCK Act was intended to prevent members of Congress from benefiting from trading on material, nonpublic information. Despite allegedly misusing their brokerage accounts by violating their promise not to benefit from their positions of power, no member of Congress has ever been successfully prosecuted under the STOCK Act. And it seems obvious to those examining the timing of their trades that widespread abuse is occurring.
To remedy this corruption, the Restore Trust in Congress Act was submitted in the House in 2025. It has not yet passed the House or Senate. We will see if it ever becomes law, and, if it does, if it will matter.
Bad Bunny’s Net Worth. Bottom line: $88 million. When you are famous, people want to know if there are finances behind it. Bad Bunny was Spotify’s most-streamed artist in 2025 and has sold out arenas around the world. In 2025, Mr. Bunny garnered significant attention from people who had never heard of him when it was announced that he would be the headliner for the 2026 Super Bowl halftime show.
Private Markets. President Trump signed an executive order to democratize access to alternative assets for 401(k) investors. Those alternative assets include private markets (i.e., assets not traded on an exchange, such as stocks or mutual funds). These investments are typically reserved for sophisticated investors with the right connections, making them generally inaccessible to the everyday investor.
The attractiveness is that an investor can acquire a stake in a company before it lists its shares on an exchange through an initial public offering (IPO). The reality is that the median stock price declines by 7.7 percent one year after its IPO. Nearly two-thirds of stocks experience negative returns after their IPOs. Many people are open to offering more options to investors. However, given the track record, some people question who will benefit the most from this—the big companies selling the products or the investors?
Those were the terms that captured the financial zeitgeist of 2025. For 2026, some early contenders are stagflation, mortgage rates, sector/style rotation, humanoid robots, and money market accounts.
Allen Harris is an owner of Berkshire Money Management in Great Barrington and Dalton, managing more than $1 billion of investments. Unless specifically identified as original research or data gathering, some or all of the data cited is attributable to third-party sources. Unless stated otherwise, any mention of specific securities or investments is for illustrative purposes only. Advisor’s clients may or may not hold the securities discussed in their portfolios. Advisor makes no representation that any of the securities discussed have been or will be profitable. Full disclosures here. Direct inquiries to Allen at AHarris@BerkshireMM.com.
