Smart Wealth Newsletter, Issue #19, December 14, 2025

Welcome to the December 14th edition of the Smart Wealth Newsletter, where we continue to document our family’s real-world journey through investing, financial markets, and long-term wealth creation. This newsletter is written from three generational perspectives that reflect how investing evolves over time.

Chris brings decades of experience in equity investing, real estate, and advanced tax strategy. Trip, who attends the A.B. Freeman School of Business at Tulane University, focuses on artificial intelligence, cybersecurity, and platform businesses that he believes will shape the next decade. Frankie, a senior at All Saints Academy, is building his portfolio early with an emphasis on innovation, electrification, autonomy, and emerging technology. Together, we share what we own, why we own it, and how we think about volatility as opportunity rather than risk.

Financial markets ended the week of Friday, December 12, 2025, under noticeable pressure, marking a meaningful pause after a powerful multi-month rally. Investors spent much of the week reassessing valuations following enormous gains driven by artificial intelligence enthusiasm, falling inflation expectations, and resilient consumer demand.

The Dow Jones Industrial Average closed at 48,458.05, finishing the week down approximately 0.6%. The Dow once again showed its defensive characteristics, supported by industrials, healthcare, and consumer staples. Stocks such as Procter & Gamble, Johnson & Johnson, and Caterpillar held up relatively well as investors rotated toward stable cash flow and dividends.

The S&P 500 closed at 6,827.41, down roughly 1.1% on the week. While the headline decline was modest, weakness was broad beneath the surface, particularly among technology and high-multiple growth stocks. Energy and financials provided some support, but not enough to offset selling pressure in megacap technology.

The Nasdaq Composite saw the sharpest pullback, closing at 23,195.17, down approximately 1.7%. Semiconductor stocks, cloud infrastructure names, and high-growth software companies led the decline, reflecting how sensitive AI-driven stocks have become to even small shifts in sentiment.

Among the biggest losers of the week, NVIDIA (NVDA) pulled back as investors questioned whether AI chip demand can continue accelerating at the same pace. Broadcom (AVGO) also declined after an extraordinary run earlier in the quarter. AMD, Micron, and other semiconductor names followed the broader complex lower. Software companies such as Salesforce, ServiceNow, and Snowflake also struggled as valuation discipline returned.

Consumer discretionary stocks experienced volatility as well. Tesla (TSLA) moved lower earlier in the week before stabilizing, as investors revisited concerns around pricing pressure and margin normalization. High-growth consumer names generally lagged as the market emphasized earnings visibility over long-term optionality.

On the positive side, energy stocks outperformed. Exxon Mobil (XOM) and Chevron (CVX) posted gains as oil prices stabilized and geopolitical risk supported demand expectations. Financial stocks, including JPMorgan, American Express, and Berkshire Hathaway, held up relatively well thanks to strong balance sheets and higher interest income.

Cybersecurity stocks, including CrowdStrike (CRWD) and Palo Alto Networks (PANW), demonstrated relative resilience. While they experienced volatility, they outperformed many AI infrastructure names, reinforcing the idea that cybersecurity spending is non-discretionary.

The pullback was driven by three primary factors: moderation of near-term AI expectations, modest increases in Treasury yields that pressured long-duration assets, and year-end profit-taking and tax planning. Importantly, the broader economic backdrop remains constructive, with cooling inflation, strong employment, and healthy corporate balance sheets.

For long-term investors, this type of pullback represents a reset, not a reversal. Periods of consolidation often create the best opportunities to add to high-quality businesses at more attractive valuations.

CrowdStrike remains one of the most compelling cybersecurity companies in the world and continues to justify its position as a long-term core holding. As cyber threats become more sophisticated, enterprises increasingly rely on AI-driven protection — and CrowdStrike sits squarely at the center of that demand.

The company’s Falcon platform is widely viewed as best-in-class, leveraging artificial intelligence and real-time threat intelligence across trillions of data points. Unlike legacy security solutions, CrowdStrike’s cloud-native architecture allows it to adapt continuously as new threats emerge.

CrowdStrike’s recurring revenue model is a major strength. Customers typically begin with endpoint protection and expand into identity security, cloud security, log management, and threat intelligence. This land-and-expand strategy drives high retention rates and steadily increasing customer lifetime value.

Trip owns CrowdStrike because cybersecurity is non-discretionary spending. Regardless of economic conditions, organizations cannot afford breaches, and AI-driven systems only increase the need for advanced protection. CrowdStrike’s relevance grows as AI adoption expands.

Financially, CrowdStrike continues to deliver strong revenue growth, expanding margins, and robust free cash flow. Management has demonstrated discipline in balancing growth with profitability — a key differentiator as investors become more selective.

As AI becomes embedded across enterprises, cybersecurity threats will only become more complex. CrowdStrike’s ability to defend AI-driven systems makes it one of the most strategically important companies in the digital economy.

Alphabet (GOOG) closed at $310.52, up 81.01%. Analysts rate GOOG a Strong Buy, targets $340–$385. Chris likes Alphabet for its dominance in search, YouTube, and cloud while embedding AI across every product.

Amazon (AMZN) closed at $226.19, up 8.74%. Analysts rate AMZN a Strong Buy, targets $255–$310. Chris likes Amazon for AWS leadership and long-term margin expansion through automation and AI.

Apple (AAPL) closed at $278.28, up 85.76%. Analysts rate AAPL a Buy, targets $295–$340. Chris likes Apple for its ecosystem lock-in and massive free cash flow.

Costco (COST) closed at $884.47, up 88.05%. Analysts rate COST a Hold-Buy, targets $900–$1,020. Chris likes Costco for its membership model and consistency.

Deere (DE) closed at $484.80, up 38.51%. Analysts rate DE a Buy, targets $515–$575. Chris likes Deere for precision agriculture and pricing power.

GE Aerospace (GE) closed at $299.81, up 200.57%. Analysts rate GE a Strong Buy, targets $330–$380. Chris likes GE for aviation demand and high-margin services.

GE HealthCare (GEHC) closed at $83.96, up 1.98%. Analysts rate GEHC a Hold, targets $85–$95. Chris likes GEHC for defensive healthcare exposure.

GE Vernova (GEV) closed at $671.71, up 562.98%. Analysts rate GEV a Strong Buy, targets $720–$850. Chris likes GEV as a generational electrification and grid modernization play.

Kroger (KR) closed at $63.19, up 29.01%. Analysts rate KR a Hold, targets $65–$72. Chris likes Kroger for dependable cash flow.

Meta Platforms (META) closed at $644.23, up 11.14%. Analysts rate META a Buy, targets $700–$825. Chris likes Meta for AI-driven ad efficiency.

Microsoft (MSFT) closed at $478.53, up 559.23%. Analysts rate MSFT a Strong Buy, targets $525–$600. Chris likes Microsoft as the backbone of enterprise AI.

Procter & Gamble (PG) closed at $142.84, up 76.46%. Analysts rate PG a Hold, targets $150–$165. Chris likes PG for defensive income.

Chris’s Fidelity portfolio complements his Morgan Stanley holdings by combining high-quality growth stocks, durable dividend payers, and select innovation leaders across multiple account types. This portfolio is designed to balance long-term appreciation with income, tax efficiency, and exposure to secular growth trends.

Amazon (AMZN) closed at $226.19, representing a gain of approximately 99% across the Fidelity trust account. Analysts rate Amazon a Strong Buy, with price targets generally ranging from $255 to $310. Chris likes Amazon for its dominant position in cloud computing through AWS, continued logistics efficiency gains, and long-term margin expansion driven by automation and artificial intelligence.

American Express (AXP) closed near $382, producing a gain of approximately 129%. Analysts rate American Express a Buy, with price targets typically between $400 and $450. Chris likes American Express for its premium customer base, strong brand loyalty, pricing power, and consistent growth in high-spend card members.

Kinder Morgan (KMI) closed at $26.73, delivering a gain of approximately 79%. Analysts generally rate Kinder Morgan a Hold / Income Buy, with price targets ranging from $27 to $32. Chris likes Kinder Morgan for its stable pipeline cash flows, attractive dividend yield, and role as a lower-volatility energy infrastructure holding.

Verizon (VZ) closed at $40.89, with the position down approximately 19%. Analysts rate Verizon a Hold, with price targets typically between $42 and $48. Chris likes Verizon primarily for its dividend income and defensive characteristics, recognizing it as a stabilizer rather than a growth driver.

Exxon Mobil (XOM) closed at $118.82, producing a gain of approximately 42%. Analysts rate Exxon Mobil a Buy, with price targets generally between $125 and $145. Chris likes Exxon for its scale, disciplined capital allocation, and strong free cash flow generation during favorable energy pricing environments.

Tesla (TSLA) closed at $458.96, delivering a gain of approximately 44% in the Roth IRA. Analysts range from Hold to Buy, with price targets typically between $450 and $550. Chris likes Tesla for its long-term optionality in autonomy, artificial intelligence, robotics, and energy storage, despite near-term volatility.

Apple (AAPL) closed at $278.28, producing a gain of approximately 157% across Fidelity accounts. Analysts rate Apple a Buy, with price targets generally between $295 and $340. Chris likes Apple for its unmatched ecosystem, pricing power, services growth, and consistent capital returns.

NVIDIA (NVDA) closed at $175.02, delivering a gain of approximately 77%. Analysts overwhelmingly rate NVIDIA a Strong Buy, with price targets typically between $200 and $250. Chris likes NVIDIA as the foundational supplier of AI compute powering global data centers and next-generation applications.

Adobe (ADBE) closed near $356, with modest gains. Analysts rate Adobe a Buy, with price targets generally between $400 and $475. Chris likes Adobe for its recurring subscription model, creative software dominance, and expanding role in digital content and marketing analytics.

Broadcom (AVGO) closed near $359, following recent volatility but remaining solidly positive long term. Analysts rate Broadcom a Strong Buy, with price targets typically between $425 and $500. Chris likes Broadcom for its exposure to AI networking, custom silicon, and highly profitable enterprise software assets.

Costco (COST) closed at $884.47, modestly lower on the week but strong over time. Analysts rate Costco a Hold-Buy, with price targets generally between $900 and $1,020. Chris likes Costco for its membership-driven business model, pricing discipline, and consistent cash flow.

Johnson & Johnson (JNJ) closed near $211.58, producing a gain of approximately 15%. Analysts rate Johnson & Johnson a Hold, with price targets typically between $215 and $235. Chris likes JNJ for healthcare stability, dividend reliability, and defensive positioning.

Mastercard (MA) closed at $571.93, continuing to compound steadily. Analysts rate Mastercard a Strong Buy, with price targets generally between $620 and $700. Chris likes Mastercard for its asset-light business model, global payment network dominance, and strong operating leverage.

Microsoft (MSFT) closed at $478.53, representing a gain of well over 500% across long-held positions. Analysts overwhelmingly rate Microsoft a Strong Buy, with price targets typically between $525 and $600. Chris likes Microsoft as the backbone of enterprise software, cloud infrastructure, and artificial intelligence adoption.

Netflix (NFLX) closed near $478, remaining volatile but positive over time. Analysts rate Netflix a Buy, with price targets generally between $525 and $600. Chris likes Netflix for its global scale, pricing power, and improving free cash flow profile.

Procter & Gamble (PG) closed at $142.84, delivering a gain of approximately 76%. Analysts rate PG a Hold, with price targets typically between $150 and $165. Chris likes Procter & Gamble for its defensive nature, brand strength, and reliable dividend income.

Palantir Technologies (PLTR) closed at $183.57, producing a gain of approximately 28%. Analysts rate Palantir a Buy / Outperform, with price targets generally between $200 and $250. Chris likes Palantir for its AIP platform and growing role as mission-critical AI software for enterprises and governments.

Visa (V) closed near $347.83, modestly down short term but positive long term. Analysts rate Visa a Strong Buy, with price targets generally between $375 and $425. Chris likes Visa for its global payment network, high margins, and long-term secular tailwinds toward digital payments.

Tempus AI (TEM) closed at $70.61, and the position is down 6.54%. Trip likes Tempus AI because it applies artificial intelligence to healthcare data at scale, and he believes precision medicine will be one of the fastest-growing AI use cases over the next decade.

Alibaba Group (BABA) closed at $155.68, delivering a gain of 100.88%. Trip likes Alibaba as a contrarian investment, believing the company’s core e-commerce and cloud assets are significantly undervalued relative to their long-term growth potential.

CrowdStrike (CRWD) closed at $504.78, producing a gain of 127.7%. Trip likes CrowdStrike because cybersecurity is non-discretionary spending, and he believes CRWD’s AI-driven Falcon platform will remain critical as cyber threats grow more sophisticated.

Broadcom (AVGO) closed at $359.93, delivering a gain of 154.11%. Trip likes Broadcom for its exposure to AI networking and custom silicon, and he values the company’s strong free cash flow and disciplined capital allocation.

Strategy Inc. (MSTR) closed at $176.45, with the position up 1.64%. Trip likes MSTR as a leveraged way to gain exposure to Bitcoin adoption, and he views the company as a long-term proxy for digital asset acceptance.

GE Vernova (GEV) closed at $671.71, delivering an extraordinary gain of 570.08%. Trip likes GE Vernova as a long-term infrastructure investment tied to electrification, renewable energy, and global power demand growth.

Microsoft (MSFT) closed at $478.53, producing a gain of 441.97%. Trip likes Microsoft because it sits at the center of enterprise software, cloud computing, and artificial intelligence deployment across industries.

Apple (AAPL) closed at $278.28, delivering a gain of 142.86%. Trip likes Apple for its unmatched ecosystem, pricing power, and ability to consistently generate massive free cash flow.

NVIDIA (NVDA) closed at $175.02, producing a gain of 59.9%. Trip likes NVIDIA because it remains the dominant supplier of AI chips powering data centers and next-generation computing workloads.

Meta Platforms (META) closed at $643.71, delivering a gain of 11.39%. Trip likes Meta for its strong free cash flow generation and its aggressive use of AI to improve advertising efficiency and profitability.

(Closing prices as of Friday, December 12, 2025)

Tenaya Therapeutics (TNYA) closed at $0.85, and the position is down 39.27%. Frankie likes Tenaya as a high-risk, high-reward biotech opportunity, believing breakthrough cardiovascular therapies could drive outsized returns if successful.

Navitas Semiconductor (NVTS) closed at $8.59, producing a gain of 15.46%. Frankie likes Navitas for its leadership in gallium nitride power semiconductors, which he believes will play a key role in EVs, data centers, and fast-charging technology.

GE Vernova (GEV) closed at $671.71, delivering a gain of 570.08%. Frankie likes GE Vernova as a foundational infrastructure company positioned to benefit from global electrification and grid modernization.

Nebius Group (NBIS) closed at $87.69, with the position up 3.44%. Frankie likes Nebius for its exposure to AI cloud infrastructure and its positioning outside traditional hyperscale cloud providers.

Microsoft (MSFT) closed at $478.53, producing a gain of 327.94%. Frankie likes Microsoft because it is deeply embedded in enterprise software and is a major beneficiary of artificial intelligence adoption.

Tesla (TSLA) closed at $458.96, delivering a gain of 54.33%. Frankie likes Tesla for its long-term potential in autonomy, robotics, and energy storage beyond just electric vehicles.

Palantir Technologies (PLTR) closed at $183.57, producing a gain of 27.59%. Frankie likes Palantir because its AIP platform is becoming mission-critical software for enterprises and governments deploying AI.

Aurora Innovation (AUR) closed at $4.39, delivering a gain of 12.56%. Frankie likes Aurora as a long-term autonomous trucking play that could significantly reduce logistics costs if the technology scales.

Meta Platforms (META) closed at $643.71, producing a gain of 11.39%. Frankie likes Meta for its strong cash generation and its ability to use AI to improve advertising performance and margins.

🏡 REAL ESTATE CORNER — YEAR-END TAX STRATEGIES REAL ESTATE INVESTORS CAN STILL USE

As the calendar year comes to a close, real estate investors still have a meaningful window of opportunity to reduce their tax liability — but only if they act intentionally and decisively. Unlike W-2 income, real estate offers one of the most flexible and powerful toolkits in the tax code. The key is understanding which strategies must be executed before December 31st and which can be positioned now for benefits realized on the upcoming return.

One of the most impactful strategies available is accelerating deductible expenses. Real estate investors can prepay certain costs such as insurance, property management fees, professional services, maintenance contracts, and even utilities in some cases. If structured properly, these prepaid expenses may be deducted in the current tax year, reducing taxable income immediately. Investors should coordinate closely with their CPA to ensure expenses meet deductibility requirements and are properly documented.

Another powerful year-end move is completing or initiating a cost segregation study. Cost segregation allows investors to reclassify portions of a property into shorter depreciation schedules, significantly accelerating depreciation deductions. With bonus depreciation still available (though phasing down over time), investors who acquired property this year — or even in prior years — may be able to generate large paper losses that offset income. Importantly, cost segregation can often be done retroactively, making it one of the most underutilized tax strategies in real estate.

For investors who actively manage their properties, confirming material participation status before year-end is critical. Material participation can allow rental losses to offset ordinary income rather than being suspended as passive losses. Keeping contemporaneous logs of hours spent managing properties, overseeing renovations, handling leasing, and coordinating with contractors is essential. Waiting until tax season to reconstruct participation can weaken the position in the event of an audit.

Real estate investors should also evaluate whether they qualify — or are close to qualifying — for Real Estate Professional Status (REPS). While this designation requires meeting specific time and activity thresholds, those who qualify can unlock the ability to deduct unlimited real estate losses against other income. If an investor is close to meeting the threshold, increasing documented real estate activity before year-end may push them over the line.

Another overlooked strategy is the strategic disposition of underperforming assets. Selling a property at a loss before year-end can generate capital losses that offset capital gains elsewhere in the portfolio. In some cases, investors may intentionally exit weaker properties to rebalance capital while improving overall tax efficiency. Care must be taken to avoid wash-sale-like issues and to ensure transactions are bona fide.

Energy efficiency credits and deductions are another year-end opportunity. Improvements such as solar installations, HVAC upgrades, insulation, and energy-efficient windows may qualify for federal, state, or local incentives. In addition to lowering operating costs, these improvements can produce tax credits or accelerated depreciation, improving both cash flow and after-tax returns.

Debt strategy also matters. Refinancing does not trigger a taxable event, and cash-out refinances can be used to fund new acquisitions, renovations, or debt paydown without incurring current taxes. While interest rate considerations matter, many investors underestimate the tax efficiency of leverage when used conservatively and strategically.

Investors using short-term rentals should also review compliance with short-term rental rules, which may allow income to be treated as non-passive if certain criteria are met. This can create powerful opportunities to offset other income sources while still benefiting from depreciation and expense deductions.

Charitable strategies can also be layered into real estate planning. Donating appreciated property or fractional interests to qualified charities can produce significant deductions while avoiding capital gains tax. Similarly, using a Donor Advised Fund (DAF) in high-income years can help smooth tax liabilities over time.

Finally, year-end is the ideal time to coordinate proactively with your CPA and real estate advisor. Too many investors wait until tax season, at which point most planning opportunities have already expired. The most successful real estate investors treat tax planning as a year-round discipline — not a once-a-year event.

The bottom line is simple: real estate rewards those who plan ahead. Even in the final weeks of the year, investors who take action can materially reduce taxes, preserve capital, and position themselves for stronger long-term returns. Taxes are often the single largest controllable expense — and real estate remains one of the best tools available to manage them.

As we wrap up this December 14th edition of the Smart Wealth Newsletter, one theme stands out clearly: long-term wealth is built through discipline, patience, and informed decision-making — not by reacting to short-term market noise. Markets will fluctuate, individual stocks will experience volatility, and headlines will continue to shift sentiment week to week. But by focusing on high-quality businesses, sound real estate strategies, and thoughtful tax planning, investors can position themselves to compound wealth over time. Our goal in sharing this family journey — across generations — is to show that investing is not about perfection, but about consistency, education, and staying committed to a long-term plan.

This newsletter is for educational and informational purposes only and reflects the personal opinions and investment activities of our family. It is not intended as financial, investment, tax, or legal advice. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. Readers should conduct their own research and consult with qualified financial, tax, and legal professionals before making any investment or financial decisions.