Executive Summary: Stocks rise much more often than they fall, and that remains my baseline for 2026. But elevated valuations and an AI-driven rally leave little room for error in the broad market indexes. I’m staying invested—but diversified, cautious and patient—seeking solid returns without relying on any single outcome to generate my gains.
Prediction is very difficult, especially if it's about the future.
Whether that line belongs to Nobel Prize-winning physicist Niels Bohr or Hall of Fame catcher Yogi Berra is beside the point. The message is what matters: No one knows what the future holds.
For investors, the challenge runs even deeper. Even if you somehow knew what was coming next, you still wouldn’t know how other investors would react to it. So, even having tomorrow’s headlines wouldn’t necessarily translate into profitable investment results (see here).
None of that stops Wall Street strategists—nor commentators elsewhere—from confidently telling investors what the next year will bring. Forecasts will be made, targets will be published and conviction will be expressed.
Heck, you’re reading my annual outlook article right now.
But my approach is different. You won’t find any year-end return targets here. Instead, I aim to provide context—to describe the environment as I see it and explain how I’m positioning the IVA Portfolios in response.
Rather than hand you a fish, I want to help you learn how to fish so you can pursue strong long-term returns while staying within your own risk comfort zone.
With that in mind, here’s my high-level take on stocks, bonds and cash: