Welcome to the first issue of “Ethel’s Diamond Post” for 2026. We aim to keep you informed about our recent performance, market outlook, and our strategic plans for 2026 to reinforce your confidence in our partnership. Our proactive strategies are designed to navigate economic uncertainties, including inflation and geopolitical unrest, so you can feel assured that your wealth is protected. Your efforts in 2025 made a real impact, and as we embrace new beginnings, we reflect on closing old chapters and opening new opportunities. Our top priority remains serving our VZD CAPITAL MANAGEMENT, LLC. family—one client at a time. Since founding VZD Capital in 2013, I never imagined serving so many exceptional individuals and multigenerational families worldwide. Nikisha and I feel honored, privileged, and blessed to make a difference in so many lives. We sincerely value the trust and confidence you’ve placed in us, which motivates us to stay vigilant and proactive in managing your wealth. Our primary goal is to build and preserve wealth as the world continues to turn amid this economic maze and ever-changing landscape. We remain vigilant about market fluctuations and are committed to proactive strategies to protect your wealth during uncertain times, including risks such as inflation, geopolitical unrest, and market volatility. This approach reassures you that your assets are actively managed against these challenges, fostering confidence in your financial future. Looking ahead to 2026, our strategic outlook aims to inspire confidence and optimism about the opportunities for your wealth.
As we reflect on 2025, we recognize that domestic stocks were volatile, but our proactive management helped navigate these swings. The S&P 500 returned 17.22%, with only three sectors – technology, communications, and industrials – outperforming the index. Despite notable volatility, the S&P 500 posted its third consecutive year of gains of 15% or more. This resilience highlights opportunities amid market fluctuations and reinforces our commitment to navigating these changes for your benefit. For example, our focus on sectors such as technology and industrials was driven by our outlook for AI growth and infrastructure needs, which contributed to your portfolio’s performance. Key contributors to 2025’s significant returns include Nvidia, Broadcom, AST Spacemobile, Palantir Technologies, and Micron, all of which significantly outperformed the S&P 500 and their respective industries. Several catalysts are expected to drive the stock market in 2026, including strong corporate earnings, a continued AI boom fueling capital markets, and a wave of capital investments, all pointing to a promising year ahead. The industrial sector, which supplies the equipment necessary for data centers, stands to benefit from the AI boom, presenting promising opportunities for growth and diversification.
Yet we are aware that the S&P 500 has historically performed poorly during midterm elections when a new president is in office. The index has declined by an average of 7% in those years. You might wonder why. Midterm elections create policy uncertainty, mainly because the president’s party tends to lose seats in Congress. Markets tend to fall during periods of uncertainty because investors are unsure where to put their money. Will the political party in power lose enough seats in Congress to disrupt the president’s economic agenda? This period can be challenging, but our proactive management aims to navigate these risks effectively. We adjust our strategies based on historical cycles and diversify across sectors, including hedging, to help maintain stability and confidence in your investments during these times, regardless of political shifts.
VZD is optimistic that a new year brings new opportunities to grow and preserve your wealth through new strategies, changes in asset allocation, and rebalancing out of companies with lofty valuations into value-oriented sectors. We plan to focus on industries like healthcare, industrials, and precious metals, which have shown resilience. Our team carefully analyzes market trends and company fundamentals to select investments that align with our strategic outlook for 2026. The stock market is also unpredictable; therefore, we must monitor the portfolios to ensure they exceed our expectations. Sensational stocks come in all sizes, and it’s easy to follow the headlines and invest in brand-name businesses that have consistently delivered for investors, but what about the “no-name” companies that will be instrumental in the financial arena, the healthcare sector, and the industrials? We proactively added gold and precious metals to the portfolios, which contributed to the strong performance in 2025 and to the continued strong performance in 2026 thus far. Gold surged more than 70%, while silver gained more than 140%, outpacing equities, bonds, and even most cryptocurrencies. Outside the U.S., global equity markets posted some of the strongest performance in years. Remember, the market does not move in a straight line; therefore, it is critically essential to diversify “within and across” different sectors to help reduce market risk and volatility, giving you a sense of security and control over your investments.
The bond market finished the year with modest positive returns, driven by falling yields late in the year, while credit spreads remained stable for the most part. Therefore, we have added preferred stocks to increase income potential, especially for those looking to supplement their standard of living with a steady stream of income in the upcoming year. We believe in consistent dividend-paying companies and real estate investment trusts to add diversification to portfolios while supporting our growth and income perspective. Market outlooks are “hope and see” and “best guess” scenarios, and no one’s crystal ball is always accurate. With both bulls and bears offering credible arguments, a disciplined approach to investing in 2026 is essential. Diversification remains our friend, and as a smaller firm, we can execute changes without the layers of bureaucracy. We constantly focus on the fundamentals of earnings growth, strong balance sheets, and pricing power. Stocks with sound fundamentals are more likely to withstand volatility if macroeconomic headwinds intensify. In a higher-volatility environment, risk tools such as hedging and allocation shifts should be considered for clients with shorter investment horizons or high sensitivity to market swings.
Nikisha and I are processing the required minimum distributions for our retirees. We are focused on ensuring that tax liability preferences are up to date. If we have any questions, we will call before processing your 2026 distribution amounts. As part of our compliance standards, we are updating ADV Parts 2A and 2B, as well as the Privacy Policy, to highlight any significant changes to our operations. The 2026 Acknowledgment Forms will be sent to let you know that we have updated our brochures. If you have any questions, please do not hesitate to contact us at (816) 726-7066.
We are excited about this new year and look forward to the “best is yet to come” motto. If you know others who might benefit from our private investment management services, with a minimum investable asset of $250,000, we will welcome your referrals. Thank you in advance for your continued support and consideration.
With Gratitude,
Ethel and Nikisha
