Carolyn Barnette

If the last few years felt a bit like walking through a casino where almost every table was paying out, 2025 has been the point in the night when the lights come up a bit and you notice the house edge again. From 2020 through 2024, the equity market rewarded almost any risk you took. In that period, more than half of S&P 500 companies delivered annualized returns above 15%, and about 90% had positive annualized returns. In other words, simply “putting chips on the table” worked unusually well.

2026 Year Ahead Outlook AI, Income & Diversifiers Explore 2026’s regime of improving growth, easing policy and AI-driven productivity, and how investors can adapt portfolios to shifting market dynamics. We expect 2026 to be characterized by above-trend growth, easing policy, and accelerating productivity – a backdrop we believe favors selective risk taking. This market requires new portfolio construction tools.

Key Takeaways 2025 showed the importance of staying invested in a diversified portfolio: global stocks delivered strong returns despite several pullbacks. Bonds returned to being a stabilizer, and Fed rate cuts provided additional tailwinds supporting bond returns over cash. Looking to 2026, many of our investors remain constructive on stocks, particularly U.S. and emerging markets, while seeking balance through bonds, alternatives, and option strategies.