The U.S. stock market moved higher in December (after a mostly flat November) and now looks poised to finish the year with its 3rd consecutive year of double-digit gains.  Quite impressive!

In 2025, some key themes surrounding the stock market’s performance during the year included:

• Artificial Intelligence (AI) was a major driver: Information Technology stocks related to AI and cloud computing drove most of the markets gains.
• Market Breadth Expanded: While the mega-cap info tech and communication services stocks led the way, the market returns broadened out later in the year, with sectors like Financials and Healthcare performing well.
• Monetary Policy: The Federal Reserve cut interest rates multiple times during the year.  This supported the economy while the job market slowed.
• Economic Resilience: Despite headwinds such as a government shutdown and lingering, elevated inflation, the market seemed to hold up well, buoying investor confidence.

Note – the monthly and annual percentages noted below are through 12/26/25.

During December, the S&P 500 managed to rise a bit less than 1%, but surprisingly it did so with only 5 of its 11 sectors in the green.  Financials (+4.0%), Materials (+2.9%) and Industrials (+2.3%) led the way in December.  Pulling down the index were Utilities (-4.9%), Real Estate (-2.0%) and Consumer Staples (-1.2%).  With these down sectors being some of the smaller sectors in the index, one understands how the index could finish positive in December despite their returns.

My Portfolio had a good ratio of gainers to decliners in December (as you’ll soon see), so it appeared to follow along with the overall positive performance of the S&P 500 index.

For the year, all 11 S&P 500 sectors are in the green, although barely so for the Real Estate sector (+0.5%).  Communication Services, Information Technology and Industrials have driven the S&P 500 to about a 17.4% gain, closer to 19% with dividends reinvested.

I’ll be covering my usual items in this month’s Portfolio Thoughts post…

• Price Movement – I’ll look at my top advancers and decliners in my Portfolio during the past month.
• Top 10 Review – I’ll update my Top 10 Portfolio stocks and how they changed rank this past month.
• Weightings – I’ll examine the sector weightings within my Portfolio and let you know where I’ve made progress with regard to getting into my preferred weighting ranges.
• Watch List – I’ll share which stocks I’m looking at as I prepare to invest my capital in the coming months.

Here are my Portfolio Thoughts for December 2025…

 

Price Movement

Note – my price changes cover closing prices from 11/21/25 to 12/26/25.

For the 1st time in 4 months I’ve recorded more stock gainers than stock decliners in my Portfolio.  I’m happy to break the streak!  The gainer/decliner ratio was just better than 2:1 for December.  Of my 58 holdings, 40 rose in price, while the remaining 18 declined.  Best of all, the big movers were on the positive side.  Looking at stocks/funds that moved at least +/-5%, it was 19 to 1 on the positive side.  Now that’s what I like to see!

Here were the stocks with the biggest moves to the upside and downside…

 

Of my 40 stocks that climbed in price in December, none advanced by 20%.  However, there were 4 stocks that recorded in excess of a 10% gain (the usual threshold I monitor for).  In addition, another 15 stocks gained at least 5%.

My top gainers in December were:

• Salesforce (CRM), popping 17.16%
• Meta Platforms (META), advancing 11.62%
• Texas Instruments (TXN), jumping 10.97%
• JPMorgan Chase & Co. (JPM), gaining 10.03%
• FedEx (FDX), rising 9.98%

 

CRM managed to jump from my top decliners list last month, to the top of my top gainers list this month.  A nice rebound, for sure.  Yet, there’s still a bit of work to do to climb over the $270/share price where it spent most of the spring and summer.

It appeared that when I initiated my META position on Halloween, that I may have been too early in my purchase, as the stock continued to drop significantly.  I did end up buying some additional shares during the secondary drop, but this month’s price recovery has led the stock price above where I initiated my position, so that makes me feel a little better about my original purchase.  The catalyst for the upside was META saying they’d reduce spending on their metaverse efforts.

My second tech stock cracking the top gainers list in December was TXN.  It was a good recovery after dropping to a 52-week low in November.  Unfortunately, TXN is still negative for the year and it appears the stock will finish the year in the red.

My last double-digit gainer for the month was JPM.  Its rise in December has pushed the stock price to a new 52-week high, and stopped a two month streak of slightly lower stock prices.

Make it back-to-back months on my top gainers list, and the 4th consecutive month of gains for FDX.  FDX led all my Industrials in December, squeaking out a victory over Cummings (CMI).

Note – two sectors in my Portfolio had all their holdings in the green this month… Information Technology (10) and Industrials (9).

 

Of my 18 stocks that retreated in price, none declined by more than 20%, and not one pulled back by 10% either.  In fact, just a single stock declined by more than 5%.  Those are some well contained losses!  It’s too bad this can’t be a more regular occurrence.

My worst decliners in December were…

• Quest Diagnostics (DGX), sinking 8.01%
• Medtronic (MDT), retreating 4.62%
• Procter & Gamble (PG), dropping 4.09%
• Air Products & Chemicals (APD), slipping 3.87%
• NextEra Energy (NEE), falling 3.68%

 

A couple of Healthcare names top my decliners list in December.

After reaching a new 52-week high last month, DGX gave back those gains in December, and then some.  It’s still been a good 2025 for DGX, as the stock has appreciated in price roughly 15%.

The 2nd Healthcare name is MDT.  In November, MDT crossed above the $100 mark.  But, now it’s below that level again after December’s performance.  Overall though, it’s been a good year for MDT, having broke above a range it traded in for 3 years.

As a group, Consumer Staples didn’t fair too well in December.  Thus, it shouldn’t be a surprise to see PG on my top decliners list.  PG reached a new 52-week low in December and has now lost about 15% in 2025.  Current investor concerns include: a tougher economic environment leading to slower consumer spending, increased competition from private labels, and margin pressures from rising promotions and tariffs.

After another decline in December, APD stock is now down around 15% for 2025.  The company had a strategic shift away from large energy projects this year.  This led to a massive charge and a net loss which in turn has led to activists questioning management and the stock’s performance.  Debt levels have risen and free cash flow has been pinched, as evidenced by the miniscule dividend growth this year.  2025 looks like a year to forget for APD.

Closing out my top decliners list was NEE.  After 6 months of gains from May through October, NEE has experienced its 2nd straight monthly decline.  The decline wasn’t too significant in December, especially considering how bad December was for the sector, but it was worse than last month.  NEE is up around 11% in 2025.

Note – one sector in my Portfolio had all its holdings in the red this month: Consumer Staples (4).

 

Top 10 Review

I would say that Top 10 movement was fairly limited again this month.  There were two pairs of stocks that swapped places in the Top 10… one pair in the upper half and one pair in the lower half.  The largest climb up was a single spot, while a single spot was also the most a stock fell in the rankings.

No new stocks cracked my Top 10.  Caterpillar (CAT) was the most recent entrant, arriving last month.

On a bright note, 8 of my Top 10 stocks finished in the green in December – only AbbVie (ABBV) and Aflac (AFL) were in the red.  The generally positive moves translated to my Top 10 having a larger weighting in my Portfolio by the end of the month.

 

Broadcom (AVGO) once again remained in my #1 spot.  Its weighting is so large relative to my #2 stock that I don’t see a ranking change anytime soon.  The stock continues to have a weighting well above 5% in my Portfolio, which does provide some concern.

Qualcomm (QCOM) and AFL switched spots at #2 and #3, with QCOM rising one spot and AFL falling one spot.  These two stocks are close enough in weighting that a ranking swap between the two next month wouldn’t be a surprise.

The next three stocks in the ranking remained the same as last month.  ABBV, Visa (V) and BlackRock (BLK) continued to lay claim to the #4, #5 and #6 positions, respectively.  However, V has moved close enough to ABBV to surpass it in the rankings by next month.

The other swap in the rankings took place between JPMorgan Chase & Co. (JPM) and RPM International (RPM) in the #7 and #8 spots.  JPM rose in the rankings to secure #7, while RPM fell to #8.

Rounding out the Top 10 stocks were Caterpillar (CAT) at #9, and Fastenal (FAST) at #10.  These were the same Top 10 rankings they held last month.  Both gained in December and increased their weighting in my Portfolio.  CAT has topped a 3% weighting now, but FAST remained a shade below that percentage.

 

 

Outside my Top 10, and potentially within striking distance to enter, are Lowe’s Companies (LOW) and Nexstar Media Group (NXST).  However, each is lower in value than FAST by more than $2K.

 

From the table above, my Top 10 holdings now comprise 43.12% of my Portfolio value.  This is an increase of 0.33 percentage points compared to last month.  The strong gains posted by the majority of my Top 10 in December resulted in the loftier weighting.

As for the dividend weighting of my Top 10, it now stands at 26.15%.  This is an increase of 0.41 percentage points compared to last month.  Recent dividend raises from Broadcom (AVGO), Aflac (AFL) and AbbVie (ABBV) helped push my Top 10 dividend weighting higher.

 

Weightings

 

In general, for the Sector Diversification, I target being within +/-3 percentage points of the sector weightings of the S&P 500.  For the SuperSector Diversification, I target being within +/-5 percentage points.

The “Weight Diff.” column shows which sectors sit outside my preferred weighting ranges.  If I’m overweight a sector, it’s shaded green.  If I’m underweight a sector, it’s shaded red.  If I’m within my target weighting range, then no shading exists.

For the 1st time in four months, there were a change with regard to having more or less sectors in my preferred weighting range.  Materials is no longer an overweight sector.  Unfortunately, this was due to under-performance from my Materials stocks relative to those in the S&P 500 index.  This left me with 3 overweight sectors and 3 underweight sectors in my Portfolio.  Industrials is still my most overweight sector and Information Technology is still my most underweight sector.

The sector in which I made the most progress towards reaching my preferred weighting range was in Communication Services.  I went from being 3.74% underweight to being 3.44% underweight… a gain of 0.30 percentage points.  The recent addition of Meta Platforms (META) and its gain in December helped here, as did the solid December gain from my largest Communication Services holding, Nexstar Media Group (NXST).

The sector in which I regressed most was in Consumer Discretionary.  There I went from being 4.81% underweight to being 5.28% underweight… a loss of 0.47 percentage points.  My Consumer Discretionary stocks lost ground relative to last month, while those from the S&P 500 added nearly 0.40 percentage points.

As for dividend weightings, I now only have 3 sectors exceeding 12%, although Industrials is barely below at 11.99%.  Energy now provides a 4% dividend weighting, however Real Estate continues to work to reach that level, as it finished at 3.96%.

My biggest change in dividend weighting was in the Information Technology sector (+0.16 percentage points).  This was due to the double-digit dividend raise provided by AVGO in December.

 

As always, I’ll keep all my sector weightings in mind as I continue to adjust my Portfolio, and my watchlist.

 

Watch List

After my VICI Properties (VICI) purchase earlier in the month, I literally had one penny in cash in my brokerage account.  Thus, it would seem that I shouldn’t worry too much about maintaining a watchlist if there’s no cash to invest.  However, if I choose to sell a laggard stock and invest in a better one, I still need to have my watchlist ready to go.

 

Within my Portfolio, here are a few stocks that I’m watching for possible additions…

NNN REIT (NNN) has dipped below my $40 target once again.  I think the stock could possibly be had below $39, so I’ll hold out for that.

I still like Nike (NKE) below the $60 level, and it crossed that threshold earlier in the month (although it’s above $60 currently).  The stock never reached my preferred level of $56 though.

Automatic Data Processing (ADP) has rebounded a bit to around $260, but that’s not far above the $250 level I was hoping to buy below.  I’ll keep my eyes on this stock a little longer.

With the decline in Pepsico (PEP) shares this year, the stock has become interesting.  The current price of ~$144 seems fair, but should it drop to $130, I’d definitely like to add.

 

Eastman Chemical (EMN) is still on my chopping block, as I could afford to reduce my Materials weighting and this stock has under-performed.

FedEx (FDX) could be on my chopping block as well.  Reducing my Industrials weighting is needed, and while this stock is performing well, it seems a little overvalued at the moment.  It’s my smallest Industrials position, so I shouldn’t miss it too much.  Also, its dividend is not the safest (although still rated ‘Safe’ by Simply Safe Dividends with a score of 64 out of 99).  I could roll the sale proceeds into my Info Tech sector, possibly bolstering my Salesforce (CRM), Amdocs Ltd. (DOX) or Accenture (ACN) positions.

 

As for non-Portfolio stocks that I’m watching…  I’m still watching the same 4 stocks.

Zoetis (ZTS) spent most of December recovering from the low it put in just below $116 early in the month.  Another dip below $120 would be interesting.

Costco (COST) continues to trend downward and seems to have fallen out of favor a bit.  The stock trades around $865 these days.  The stock still trades at a premium at that price.  I’ll continue to watch the stock and hope for an even better entry point.

Cactus Inc. (WHD) traded in the mid-$40s almost all month.  I’d prefer to buy below $40 given the high Beta this stock has.

Waste Management (WM) has continued to trend higher after bottoming in late October / early November.  I was hoping to see a $200 price again, but it’s moving up and away from that level.  Perhaps I’ll get another chance in the coming months.

 

Thoughts?

After 3 years of double-digits gains in the stock market, how does the setup look in your mind for a 4th consecutive year of such gains in 2026?  Please share your thoughts!