Happy Holidays and a Happy New Year! This year has certainly been exciting in financial markets as analysts scrambled to adjust their forecasts in accordance to the seemingly weekly changes in economic conditions. However, as the year comes to a close, we are happy to have seen another great year for stocks and that the return on our equity investments exceed that of the S&P 500 once again. This year we have seen consecutive quarters of record GDP growth, and consistent gains in productivity. Inflation has also remained in check as the Federal Reserve aims to lower interest rates, with some economists anticipating more than one rate cut in 2026.

Looking forward to next year, market forecasters predict yet another strong year for stocks, with many revising their targets for the S&P 500 upwards. In particular, Ed Yardeni of Yardeni Research recently published a target of 7700 for the S&P 500, in which he forecasts that the market in 2026 will be driven by earnings growth as it was in the second half of 2025. Consensus estimates from industry analysts for S&P 500 earnings indicate a 14.7% increase next year and a 14.6% increase in 2027, which represents a bullish outlook. Regarding revenues, consensus estimates predict 6.4% growth this year, 6.9% growth next year, and 7% growth in 2027. Yardeni describes these estimates as “very optimistic,” citing an average revenue growth rate of 4.5% since 1993. At Worcester Advisors, we share in Yardeni’s optimism. Productivity increases, lowering interest rates, and earnings growth may contribute to an extension of the current cyclical bull market.

We are also excited to announce that Jacob Wharton will be joining us full time as an Investment Advisor officially on January 1st. He has been a part of the team for a year and a half working part-time while finishing his Masters of Science in Finance at Clark University. Jacob is a Worcester local, having attended Saint John’s High School in Shrewsbury. He then completed his Bachelor degree at Wheaton College, where he played on the lacrosse team and was a two-time team captain. After Wheaton, he attended Clark University for his Masters of Finance, and recently graduated with a cumulative GPA of 4.0. We look forward to him joining the company and to another strong year in equity markets!

At Worcester Advisors, we continue to recommend investment in well diversified portfolios of high-quality companies with consistent earnings growth as the safest method of achieving capital growth.

Your team,

Dave, Joe, Sangam, Jake, & Anton