We are in the last full week of trading for 2026 with S&P 500 hovering above 6800.
You can make any prediction for next year that suits your taste.
I would say that most forecast future growth for equities, but some see this coming to a sharp turn south.
I find reasons for a retreat to be a bit much with most expressing the thought that the market is essentially priced for perfection and the odds are against such.
I long felt the market was overpriced and was proven wrong.
I do think that we are promised much on the impact of AI and patience won’t be on the table if results fall even a bit short.
Some of the biggest concern is the amount of capital being in
vested and the potential for the return to be less than projected.
The fear is that the shelf life of these incredibly expensive data centers is less than five years, so there is no room for complacency.
I am as far from an engineer as you can get education wise and it is difficult for me to just keep my phone and laptop working at the basic level.
To comprehend where we are heading is beyond my understanding. I do, however, grasp equities markets and the war between greed and fear.
The real test will be when we get a setback.
The last three years have found the market spring boarding off any drop repeatedly.
It has worked until it doesn’t.
I do think the economy will improve in 2026 with the initiation of the tax bill. There are plenty of incentives to move capital into investing.
Lower rates will pull more capital from the sidelines. We are forced as a country to compete economically against the Chinese. There is no avenue to sit and relax.
Technology will drive change faster whether we want to be a player or not. We all will find the train has left the station and if you are not on, you likely won’t catch up.
I am a big believer in the free market economy. I completely understand that there will be big winners and a vast number of losers. The concept, however, is that you can recover if you reengage.
Trying to find the sweet spot in this market has been made far too simple. Some jumped on the Mag 7 bandwagon and off they go making real money.
If you have trimmed some gains here at the end of the year, you should gladly pay those resulting taxes.
How long you hold on is the real test. You only have to look back at previous big winners like IBM and GE. The former is making moves to come back while the latter split itself into parts and came roaring back.
I’m not suggesting you hang on to losers as there are far too many companies that have gone by the wayside.
This is not a game for the faint of heart or those who time relaxing.
This is a stimulus-fueled, never-ending exercise.
So, as we close in on Christmas, I think that you should be happy about your situation.
I’m certain there have been bumps along the way, but we are far from being in bad shape.
While this could easily change in 2026, I say enjoy the holiday season. We will leave next week to the time for reflection and thoughts of alternative paths of action.
Being a grandfather of 10, I have almost taken the easy path of financing those kids Christmas. Lazy but effective.
To my amazement, some of them are saving birthday and Christmas money to buy something of significance, like a computer.
It is almost like they actually might be listening to me drone on about finances.